Many Australian taxpayer own the rental property as means of retirement plan, steady income source or an opportunity to make a gain in future. Rental property usually owned by individual or owned by other business structure like unit trust, discretionary trust, Pty Ltd etc.

Owing a rental property may have below tax consequences: –

• You pay your top marginal tax rate on any net rental income derived from rental property.
• You can deduct net rental loss if any from rental property from your other income, where you save your top marginal tax rate.
• When you sell the rental property; you pay your top marginal tax rate on any taxable capital gain or no tax in case of capital loss.
• Here taxable capital gain means capital gain after applying exemption as per tax law
• Here net rental income means; rental income minus rental expenses including building depreciation

The one of the tax benefits of rental property is, you can claim depreciation of rental property building cost as deduction, which is not cash expenses. That means you are not actually paying cost, but you are saving your top marginal tax rate (which may vary from 0 to 47%) of depreciation amount per year depending upon your taxable income. Another tax benefit of rental property is 50% discount on capital gain (must hold at least 1 year or more), Which means you may just pay minimum O% To 23.5% tax on total capital gain based on your taxable income.

Our tax consultant has wide tax knowledge when it comes to serving rental property owner. We play crucial roles re; rental property from structuring the rental property ownership to claiming all the rental expenses allowed by tax act. We provide below services in term of rental property tax: –

• Pre-rental net rental income calculation (important to decide whether to buy or not)
• Structuring rental property ownership based on your situation and future goal (Personally, Unit Trust, Discretionary Family trust, Company etc)
• Depreciation report decision
• When to sell (good idea if your taxable income fluctuates)
• Capital gain calculation including possible exemption.