Benefits and Advantages in Brand New Investment Houses Realised
Posted
in Updates
@ May 11th 2013 10:08am
- By Garry Larden
Benefits and Advantages in Brand New Investment Houses Realised
The Australian Tax Office (ATO) recently released the taxation statistics for the 2010/11 financial year. The statistics showed that over the year there were 1,811,174 individuals that owned a rental property. This was out of 9,416,002 individuals that have a taxable income and 12,637,623 individuals that lodged a tax return.
There were 1,213,595 individuals with a negatively geared property over the 2010/11 financial year and the number is rising as people realise the benefits and advantages in holding brand new residential investment properties.
According to the ATO data, 72.8% of individuals that owned an investment property owned just 1, while 18.9% of individuals owned 2 properties and 0.9% of individuals owned 6 or more.
Negative gearing works when it reduces an individual’s taxable income to such an extent that there is a greater financial windfall from claiming that loss than there would be if that property made a profit. Of course investors using a negative gearing strategy also expect the value of their asset to rise, offsetting the shortfall and these benefits are usually more likely to accrue to those earning higher incomes but over the long term the capital growth aspect means everyone is a winner.
