How Australians Can Pay ZERO Taxes Legally? Australian Real Estate | Property Investing Australia
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- Опубліковано 9 чер 2024
- We talk about how to pay no tax in Australia, how to structure investment properties and build an investment portfolio.
To Contact Nick Hill, at Walker Hill
Phone: (07) 3367 3155
www.walkerhill.com.au/
podcasts.apple.com/au/podcast...
WARNING: THIS VIDEO IS GENERAL ADVICE ONLY, this is not intended to be taken as
advice you need to seek personal advice for your individual circumstances.
00:00 How Australians Can Pay ZERO Taxes Legally? Australian Real Estate | Property Investing Australia
00:51 Changing from owner occupier to investment property
02:06 How to pay no tax in Australia on a capital gain
05:00 What the ATO looks for
09:20 How do taxes work on a rental investment property?
12:23 What expenses can you claim on an investment property?
16:20 Top mistakes made when purchasing an investment property
18:50 Investment property structuring mistakes
20:00 Nick Hill, Walker Hill Accountants
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If the government actually taxed gas, mining companies, and investment property. We wouldn't need to pay any income tax and need to find the loopholes the rich use.
The government already taxes gas and mining. That's where revenue comes from for aged pension, Centrelink,NDIS etc
You can deduct travel expenses... Heres how:
Have a trust that owns a company that owns the property. That company then leases/hires a car for you to use to travel to the property to inspect. That is an expense for the company. Making it tax deductible.
It's criminal that we accept having to pay any tax for property that we own.
agreed!
We pay our mortgages on after-tax income.
We pay fees for buying and selling (stamp duty).
We pay land usage taxes for the property we 'own' (rules vary by state)
When we sell, they want a huge chunk of the profit!
@@crazyg74 Agree. With a devaluing dollar, it is not even profit. CGT is a tax on keeping up with inflation.
Not really as you can own more than one and sell it to anyone in the world. I would agree if it was the land is leased and rather remains in the public domain so to speak.
There's another way you can avoid GCT. If you shift between residences and change your PPOR to new one, you have 6 months to sell the old PPOR. Both are treated as a PPOR during this 6 month transition period.
A couple of points to add.
1) You can claim the property as your principle place of residence for more than 6 years as long as you don't rent it out for more than 6 years. EG: You can move out for 12 years and during that time rented it for only 5 years (other 7 years your parents lived there) and still claim the 6-year rule.
2) You can move back into your property before the 6 years, then move out again and the 6 years starts all over again.
3) There is no minimum 6 to 12 month 'rule of thumb'. The ATO doesn't work with 'rule of thumb" laws. As long as you have 'lived' in the property, the rule will apply.
Thanks for watching - That's a great addition! It highlights the flexibility within the 6-year rule on capital gains tax exemptions for principal residences.
Fact!
What if you rented it out for a couple years and moved into it afterwards?
Like if I rented out a place I own for two years and I move into it as my principal place of residence afterwards would that still apply?
How do you declare a new residence as well?
yeah i think its the time server your on that is the region, so currency exchange and the exchange rate is a funny thing
great video
Thanks for the visit
would it be possible to use this method and use a interest only term during the first 12 months?
Yes, it's definitely possible to opt for an interest-only term during the first 12 months of your mortgage. This approach can offer some breathing room by lowering your monthly payments initially, as you'll only be covering the interest without reducing the principal balance. However, it's important to consider the long-term implications, as your payments will increase once the interest-only period ends and you start paying down the principal. If you're thinking about going this route, contact one of our brokers to discuss further.
valuation for existing property question, do you do it just before you are going to turn it into a IP, or once you contact agent to lease it out? What about if you move in with your girlfriend and she’s owns a property which isn’t under your name? . Also do I have to contact bank to change loans to IP loan? Thanks
When you're thinking about turning your property into an investment property, it's a good idea to get it valued right before you start the leasing process. If you're moving in with your girlfriend and her property isn’t in your name, it shouldnt affect things on your end. If you need advice on your loan check in with your broker and they can advise or hit us up we need a few more details to give advice on that - www.huntergalloway.com.au/
What about the rent you paid for 5 years? Potentially paying 250k in rent to save 20k in tax? Am I not seeing something
If you keep buying and selling homes every 12 months and 1 day and sell for profit and don’t have another day job is it a CGT event upon sale ?
Excuse my ignorance. When talking about landlord tax deductions. By ‘fully deductible’ do you mean you will get 100% back from the tax office or just a percentage?
When we say that an expense is "fully deductible" for landlords, it means that the entire amount of that expense can be used to reduce their taxable income. This doesn't imply that they will get 100% of the expense back from the tax office. Rather, it reduces the total income on which they will be taxed. The actual financial benefit depends on the individual's tax rate. For example, if they fall into a 30% tax bracket, they effectively save 30% of the expense cost through reduced tax. This is an important distinction in understanding tax deductions.
This is what I assumed. It was wishful thinking on my part as I will be renting out my main residence as I am moving overseas. Now weighing up selling and getting a term deposit/investing money vs leasing out and benefiting from the asset appreciation that I expect will continue in the short while. Thanks for your wonderful and helpful content! @@MortgageBrokerAustralia
Is the info in the uploaded video still valid for ALL Aussie states?
Thanks for watching and would be advisable to seek advise from a qualified accountant
Reducing your tax liability is a smart financial move. It's all about strategic investments and leveraging tax-saving opportunities. I've seen significant benefits by diversifying my portfolio and taking advantage of tax-efficient investment vehicles. It's not about avoiding taxes, but rather optimizing them to maximize your wealth. I wasnt financial free until my 40’s and I’m still in my 40’s, bought my second house already, earn on a monthly through passive income and got 4 out of 5 goals, just hope it encourages someone that it doesn’t matter if you don’t have any of them right now, you can start TODAY regardless your age INVEST and change your future! Investing is a grand choice I made**
Certainly! It's truly inspiring to hear about your financial journey and the proactive steps you've taken to optimize your tax liability and grow your wealth. Your story surely serves as an encouragement to others that it's never too late to start investing and working towards financial freedom. Buying a home is a significant milestone, and doing so while also managing to create a stream of passive income is commendable. At Hunter Galloway, we share a similar ethos in aiding our clients to make sound financial decisions, making the home buying process as stress-free as possible, and assisting in turning their homeownership dreams into reality. Your experience is a testament to the power of strategic financial planning and investing, which aligns well with our mission of being the home for home buyers across Australia. Through diligent planning and leveraging various lending options across our panel of 30+ lenders, we aim to provide tailored mortgage solutions that cater to the unique financial situations of our clients. Thank you for sharing your inspiring journey, and we look forward to potentially assisting others on a similar path towards financial freedom and homeownership.
@ phyllisrichards5489 Investing typically demands a good understanding, and that's where having a financial consultant is invaluable. I've had the privilege of working with Regina Louise Collaro, an investment advisor affiliated with a licensed wealth management firm.
Her guidance has significantly enhanced my financial situation. She's widely recognized for her expertise, so you might have come across her name. With her support, I've attained financial security and now receive a steady monthly income through her successful passive income approach. I strongly advise considering an experienced investment advisor to boost your financial prospects.
Regina Louise Collaro is based in the United States and can work with anybody wherever they stay. If you would like more information on reaching her, you can conduct a search online
personally, I'm blessed and realizing I'm not the only one working with Regina Louise Collaro. I will consider myself lucky. I've been able to feed and make a living through her advice and great work. For such a person as Regina, I owe her gratitude, support and endless prayers as it is not easy to gain access to such a competent and reliable adviser. Who isn't just wise but has all it takes to handle an investment and is good at what she does.
what if i dont have a investment property, i am only a sole trader with no gst registered as wel
Thanks for sharing Panch
I have a house which I rented for 4 years after purchase and then I am moving in, will I have any issue selling it as PPOR?
This is my question too did you get an answer? Would appreciate any answers
6 year rule doesn't apply, because it wasn't already your PPOR when you started renting it.
this is the highest tax in the world robert Kiyosaki said Hawaii is the same 5 p interest to the agent for rental management 6p to 8 p bank loan and these prices theirs no advantage and land rates up and up shares for me now
Thanks for watching 🙌
Rule of thumb 6 to 12 months stay in the main residence.
Thanks !
Before renting....12 months
Owner occupier rules👍
Haha yes indeed
What if you buy a house and rent it out for 5 months then move in ? Then sell it 20 years later ? Is CGT owed on the gain made during the 5 months ?
Just state it was your intention to move straight in. I did it with mine, rented for 2.5 years and living in now for 4 years so far. When I sell no CGT. I can prove that When I bought the house it was my intention to move in as had spoken and gone through the process of selling the house i was living in, but due to change of work location after the first purchase I can show my intention was to move in straight away but unforeseen circumstances change. Also, how can they prove what your intention was, the burden of proof is on the Tax department
Depreciation of furniture,usually there is no furniture,no fridge etc.
If it’s a furnished property there can be. But ovens and dishwashers are pretty standard.
Thanks
dude this was great content, was good to hear it all broken down into a simple explanation
Thanks so much Chris appreciate that !
So if the house is settled and someone is still renting it for a month because that’s there lease. That’s bad for the new owner?
More it can change the owner occupied cgt exemption. If unsure in your situation speak with your accountant to get specific advice. Thanks for watching.
@@MortgageBrokerAustralia thank you, good info for people trying to educate themselves to become more aware etc
Can you rent out a room while living in the house?
Yeah its possible, just check with your broker it wont affect your first home buyer concessions if you do this immediately after buying a home.
Need to prove intent if move within 3 months
Thanks Jacq
Actually working Defence Force ( Reserves is Tax free ) only counted as income for Child Support that’s it , which obviously doesn’t apply to most . I worked in Disability and was counted as low income earner ( BUT earned another 30,000 tax free ) bones was got all my Tax back GOLD . I currently own my house , a rental property and just bought another one ☝️.
Congrats sounds like youre killing it! Keep it up and building that portfolio
@@MortgageBrokerAustraliaGreat advice on the 50% return on furnishing a B&B / home stay etc . Our latest investment in the Atherton Tablelands ( above Cairns ) we will live their for 3 months per year - Winter , With the Stamp duty I paid as it’s purchased as an investment ( can I apply to get 3 months worth back - when I live in it ? )
It’s never tax free - you have stamp duty and a lot of gov taxes just buying…
Keep in mind some states wave these for first home buyers but still a fair point! Thanks for watching.
Downside of the 1st point is that you're spending 5 years of rent on the Sunshine Coast, to build equity in your PPOR within 6 years, to sell it. So your PPOR value is going up, but you're burning that gains money on rent. All this effort for a loss, or a small win. 6 years of rent is at least 120k in most places. More likely to be 150k+. You need that PPOR to zoom up at least 200k in 5-6 years for it to be a noticeable win, after sale costs. It's possible, sure. But that's just to zero out on the rent you've spent. May as well go with a different plan tbh.
What if you move out. Rent for few years then move back in and sell after 5 years?
Might be best speaking with your accountant on that as it's pretty specific advice. Thanks for watching
It resets. It's not accumulative. The government doesn't want anyone to get ahead, hence the ridiculous taxes they develop to stifle your wealth.
All tax laws and property in Australia is designed to KEEP you in Australia either though chained to large debt or tax laws that makes you lose your primary residence . Prisoners of property
yes, I'm increasingly becoming aware of that, as I plan my escape!
None of these laws are in the original writing of our original Constitution, and it is still valid as we have not had a Monarch since Queen Victoria died, that has been lawfully recognized according to the laws and traditions of the Queen Victoria era.
So your basis for no taxation as a private individual is up to you to uphold and learn the arguments for so that the private corporation...the Taxation Office cannot enforce their fraudulent principles whereby they collect taxes that are sent directly to their offshore masters, the City of London Bankers, and if you are fool enough, you will pay them.
Our corporatised government runs totally on funds, loans that they get from the bankers, and which they get our government to print or account for out of thin air.
So we, the people pay for our government money to be printed at our expense, and then the bankers, IMF, etc., gets the credit for original ownership of it and charges interest on it that grows as it compounds each year.
We are funding the living and lifestyles of the world's elites if we pay taxes.
But GESARA is now in place, and this fraudulent system is stopping and is being replaced with precious metals backed money.
FIAT MONEY Is Disappearing now.
Just a little late. Taxation will end.
Great video!! Are these deductions solely for investment properties? Or can be used for owner occupied?
Been looking into negative gearing and the property depreciation as a legal way of not paying tax.
It mostly works on the capital works deduction in the 1st 40 years. And most houses are ancient. But that does make newer properties cheaper.
Thanks for watching
Not paying tax on loss-making investment is definitely legal, but not necessarily wise (especially if you need to use leverage to acquire the loss-making 'asset').
@@hannesRSA How does capital works deduction make newer properties cheaper?
@@uberboiz because the original cost of the building will be much higher on new properties. Maybe 50% of the purchase price, instead of an older house which might have cost only 20% of its current total value to build.
So there is a larger capital deduction.
Although I bought a property older than 40y after weighing up the benefits of larger land Vs new property with larger deductions.
Is that strategy also valid for New South Wells? To my understanding, in NSW if you sell your main house of residency you have to declare the profit that you made in your tax return, so basically you will have to pay full tax on the Capital Gain. An investment property has a 50 % of deduction, so if you made 500K, you will pay tax in the 250K and the other 250K is tax-free.
Hey Luis that’s pretty specific I’d suggest speaking with your accountant to get advice on that or reach out to Nick directly website is in the description. Thanks for watching
Tha tax rules for your annual income tax return are Federal, ie they are Australia wide. They apply the same in each state
Think you mean New South WALES!
I'm not a tax expert, but I can provide some general information. In Australia, the tax implications of selling a property can vary depending on a range of factors, including whether it is your primary residence or an investment property, as well as any applicable tax laws in your state.
Is reason housing is so bad in australia, houses should be for living not investments, comercial property should be the only prpoerty for investers.
50+% in Australia pay ff,, all taxes..
There called public self servents ove 3 level of fat fat government
State ,, federal,, local
It's important to seek advice from a qualified tax professional or financial advisor who can provide personalized guidance based on your individual circumstances and the specific tax laws and regulations in New South Wales.
100%, thanks for sharing Jasmine
Not just real estate if you have an abn you can purchase assets (related to your buisness operations) and simply accelerated depreciate them over (x) amount of years to get a heap of tax back when those assets are fully depreciated you buy more its money that the gov would have taken from you anyway thats paying your assets off but people have a hard time accepting that you have to spend money to make money youll never save your way into wealth
So waste your money on rent to avoid paying tax and then sell a property thats definitely trashed after 6 years 😂 How about keep the property for 6 years pay it down p&i and then use the funds to buy a house mortgage free
Stop Bullshit here
Nothing in the country is free. The tax system is designed to milk out the low, middle income earner on just about anything and everything. Only the top 1% the richest ppl pay lesser tax in comparison. The scenarios explained to move out from your main residence to a rental property, although it is tax-free, but I wonder why you guys intentionally left out the lost money on paying rent on the second property when you move to a rental property??? While you pay no tax on the sale of the house after 6th year, but you have already paid rent (the lost money) on the second property... wow I wonder why are you promoting such things??? or just promoting your agency for people to come to you???
Wealthy pay alot of taxes when they spend a $400000 car tax $180000 to import
Typical property spruiker talks....at best they are genuinely oblivious of the costs/expenses associated with their strategy, at worst they are deliberately misleading many aspiring property owners/investors to buy into the property market and make money out of the transactions.....
I think in this scenario they have assumed that you would be paying a mortgage on the home you live in. So when you got and rent a property (depending on where and what kind of property) you are essentially paying the rent INSTEAD of your mortgage. And somebody else pays the rent of your family home and any associated taxes. This does of course vary depending on what you own and where you rent though.
@@coopsnz1 that is why they buy expensive car and so they can afford it
You tenant pays you rent and it should cover or be similar to the rent you pay on your rental.