🚨 Australian property investors could be missing out on THOUSANDS of dollars in tax savings. And the new tax changes make this even more important!
Everyone is obsessed with finding the next booming suburb.
But what about the money you’re potentially leaving on the table through depreciation, renovations and capital gains tax planning?
I’ve been speaking with the team at Duo Tax, who say they’re now Australia’s largest tax depreciation provider.
And there are some important insights worth sharing.
1. Property investor activity is slowing
Their internal data suggests property related transactions and referrals have fallen by approximately 20%.
Sydney is showing considerable softness, while more affordable markets like Perth, Adelaide and Brisbane continue attracting investor interest.
But here’s what’s interesting.
Despite the slowdown, many investors are still overlooking opportunities to improve their returns through tax planning.
2. Depreciation schedules could still save you thousands
Under the tax changes discussed, losses on certain new investment property purchases would no longer be deductible against personal income from 1 July 2027.
Instead, those losses could be carried forward and potentially offset against future eligible property income or capital gains.
For example, imagine you have $10,000 in carried forward property losses.
If your property subsequently generates $5,000 in taxable rental profit, those losses could potentially offset that income, leaving $5,000 to carry forward.
That’s why depreciation schedules could remain valuable even when immediate negative gearing benefits are restricted.
3. Renovators could unlock significant additional deductions
This is particularly relevant to students in my Property Renovation Accelerator.
Imagine you purchase an investment property and spend $30,000 renovating it.
A quantity surveyor might identify:
- $5,000 to $8,000 in first year depreciation on eligible improvements.
- Another $15,000 to $20,000 in eligible deductions from demolished or removed building components through a scrapping assessment.
That’s potentially $20,000 or more in deductions, subject to the property’s eligibility and applicable tax rules.
And if those deductions exceed your eligible property income, some losses may be carried forward.
Many investors don’t even know scrapping schedules exist!
4. Capital gains tax valuations could become critical
The proposed transition from the 50% CGT discount to an inflation indexation approach from 1 July 2027, as discussed, could make historical property valuations particularly important.
A difference between a $1 million valuation and a $1.1 million valuation could have a substantial impact on future tax calculations, depending on the final rules.
And there’s an important distinction between an automated online estimate and a valuation prepared by a qualified professional using comparable sales and the property’s actual condition.
The Duo Tax team quoted $700 including GST for their standard valuation, with a discounted offer of $495 including GST for eligible clients who arrange it before the proposed transition date.
Keeping More of the Money You Make
Here’s my bigger point.
Building property wealth isn’t just about making $100,000 in capital growth. It’s also about legally keeping more of the money you make.
A $10,000 tax saving here, another $20,000 there, and better structuring across multiple properties can make a meaningful difference over 10 to 20 years.
Have you ever obtained a depreciation schedule or scrapping report for your investment property, or do you think you’ve been missing out on legitimate tax deductions?
Book a Free Discovery Call With Realta with PK
If you would like to understand which markets our research team is currently active in and whether a property in Melbourne or elsewhere in Australia makes sense for your situation right now, book a free 60-minute Discovery Call with our team.
There is no obligation and no cost. Just an honest conversation about your goals, your budget and what the data actually shows about where the best opportunities are right now.
Co-Founder | The Educator & Mentor
I’m also a property investor with a $27m+ debt-free portfolio of residential & commercial property, generating over $300k+ net annual passive income.
I help people from all over Australia, by accessing a unique strategy that combines high growth high cashflow residential property, alongside highly profitable property development projects to help accelerate their passive income. I typically work with families, young over-achievers, and new Buyers Agents who want a predictable, DATA-led system to grow wealth and Passive Income.