If you’re smart, this time of year can be one of your biggest advantages as a property investor. Done right, tax strategy can actually help you hold more properties, reduce your financial stress, and ultimately fast-track your journey toward financial freedom.
Recently, we sat down with OpenCorp, Portfolio Manager Khaysan, to understand what every property investor needs to know this financial year.
1. You Need Someone Who Specialises In Property Tax.
Here’s a harsh truth: not all accountants are created equal. Just like you wouldn’t hire a GP to perform heart surgery, you shouldn’t trust your average tax agent with your investment portfolio. You need someone who specialises in property tax.
The benefit? With the right tax team, property can dramatically reduce your tax bill, by up to $20–$25K per property per year, depending on your income. Over a decade, we’re talking potential tax savings of $180K to $250K. That’s a deposit on another house—or three.
2. Navigating Negative Gearing Explained
- Let’s say your property earns $30K in rent.
- But your costs, interest, maintenance, etc. total $40K.
- That $10K shortfall? That’s called being negatively geared.
Now, if you earn $90K a year, the tax office will only assess you on $80K. That’s less tax paid, which means more cash in your pocket.
Combine negative gearing with a tax variation (more on that below), and you can access that money weekly instead of waiting until your tax return.
3. Tax Variation = More Cashflow, Less Stress
Tax variation is like turning your investment property into a weekly cashback system. It allows you to receive your tax deductions in your regular pay, every week or month, instead of waiting for tax return time.
Park that money in an offset account and you’ll slash your mortgage interest while keeping your repayment buffer strong. It’s one of the most underused strategies we see.
4. Detail Every Deduction.
That means diligent record-keeping. Set up a dedicated email and folders by property and financial year. Bills, water rates, insurance, maintenance, capture it all. Every dollar counts when it comes to deductions.
And don’t forget: repairs are deductible. Improvements, not so much. Know the difference, or speak to someone who does.
5. Depreciation Schedules
If your accountant hasn’t mentioned a depreciation schedule, it’s time to upgrade. These documents detail the wear and tear of your property, on paper and can deliver thousands in tax benefits. They’re essential to unlock that tax variation I mentioned earlier.
6. The Power of the Right Team
One client we worked with recouped $43,000 in backdated tax because his old accountant didn’t understand construction-phase deductions. That’s not just a mistake, it’s a setback to your financial future.
Only take advice from people who are doing what you want to do, better than you. If your accountant isn’t walking the walk, it’s time to walk away.
