House and land tax benefits unlocked
It's tax time, so let's explore the real figures waiting to be claimed by investors.
One of the most significant advantages to choosing a house and land package is the savings you can make on stamp duty. When building new, you only pay stamp duty on the land and not the full purchase price.
Another advantage of building a new home is the depreciation benefits. The newer the property, the higher the amount of depreciation benefit available to you as an investor. Capital works deduction on a brand-new property can be claimed on the full price of the building structure over forty years, and appliances such as dishwashers, ovens and other fittings and fixtures are subject to plant and equipment depreciation which can mean substantial tax deductions for investors.
Australian Taxation Office figures released this week showed that depreciation was the second highest claim made by property investors, averaging $3,885 in the 2018/19 financial year, with the highest claim coming off loan interest (averaging $9,640). Body corporate fees came in third ($2,448), followed by land tax ($1,931) and property agent fees ($1,281).
What property investors claimed 2018/19:
- Loan interest (average $9,640)
- Depreciation (average $3,885)
- Body corporate fees ($2,448)
- Property agent fees ($1,281)
The above info is by no means financial advice, individual results will vary, and always consult a financial advisor.