4 modern advantages of virtual home tours
Checking out a new house using your mobile or laptop before bidding at an auction will be the avant-garde way of house-h...
It has been increasingly difficult for first home buyers to get their foot on the property ladder over the past year especially in the booming property markets of Sydney and Melbourne.
According to the latest CoreLogic figures, the median price of a home in Sydney during the year ending March 2017 surged by a massive 18.9 per cent to $940,000 while in Melbourne the median price of a home jumped by 14.7 per cent to $700,000.
Facing these escalating property prices, more first home buyers are now deciding to buy an investment property as their first home rather than an owner-occupier property.
These astute first home buyers are purchasing investment properties as their first home because they are finding that they have very few out of pocket expenses as the rental income can generally cover the mortgage repayments due to very low interest rates.
In addition, people buying an investment property as their first home as opposed to an owner-occupier home can qualify for major tax depreciation benefits.
For example, over the past year, DEPPRO has organised a large number of tax depreciation reports for first home buyers who have chosen to buy an investment property rather than an owner-occupier home.
These astute first home buyers are ensuring that they obtain the full tax benefits associated with buying an investment property by undertaking a tax depreciation report.
Buying an owner-occupier home does not qualify for tax benefits while buying an investment property can generate significant tax savings.
Depreciation is a legislative allowance introduced by the Australian Tax Office (ATO) that allows property investors to claim back the decrease in value of their properties and fittings.
Tax benefits obtained through obtaining an ATO complainant tax depreciation report can be equivalent to 60 per cent of the total purchase price of the property.
For a first home buyer, this can result in tax savings of over $200,000 on the purchase price of a new property such as an apartment.
These tax savings are calculated over a 40-year period in the tax depreciation report with most tax benefits flowing during the years immediately after the purchase of the property.
A tax depreciation report costs around $600 (the cost of tax deductible) and it can generate thousands of dollars in tax savings each year.
A key part of ensuring that the investor obtains their full tax benefits is to have a professional depreciation professional prepare a comprehensive depreciation report of the property
You should ensure that the company who undertakes the depreciation report is recognised as a tax agent by the Australian Tax Office.
This tax depreciation report has to be compliant with the guidelines set down by the ATO for the investors to qualify for any tax benefits. Investors should therefore check that they are employing a professional tax deprecation company who can prove that their reports are ATO compliant.