25 Jun 2021

Is Negative Gearing 90% of Rental Income and 100% for Voluntary Contribution Permitted?

Every Australian must pay their annual tax liability. However, the Australian Taxation Office acknowledges that there are methods savvy individuals use to minimise their tax liability. In real estate investing, investors have access to negative gearing. 

If the property’s income is less than the property’s expenses, investors employ negative gearing to reduce their taxable income. Investors can claim up to 90% of the property’s rental income. This is helpful if you’re trying to complete upgrades, renovations, and remodel the property. You have the opportunity to re-invest your tax savings.

In case of an audit, ensure that you keep all documentation about the property organised. It helps your tax accountant keep track of the deductions too.

Additionally, individuals can procure 100% voluntary contributions against their tax liability. In some cases, this is known as a super contribution. In others, it’s known as salary sacrifice. To optimise this option, speak with a financial professional who specialises in tax accounting.

Mortgage House works with financially astute individuals ready to maximise their income and investment dollars. Our loan specialists use innovative tools to find financial opportunities and complementary financial products. 

Negative Gearing Conclusion

Australian real estate investors have access to negative gearing. The tool leverages their expenses over their real estate income. When the rental income does not cover the rental’s expenses, the owner can claim the difference in their taxes. The difference lowers their taxable income. This is helpful in some circumstances. For more information about funding a rental property, contact our Mortgage House loan specialists. We also offer refinance home loan options.

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