What are the tax implications of owning an investment property?
Generally, if the mortgage interest exceeds the rent generated by the property then there is no taxable income. Technically, the property is generating a loss and so there is no extra income tax to pay. However, there are other taxation issues to be taken into account such as capital gains tax and land tax. This will solely depend on your current tax situation and you should consult your accountant.
Generally, if the costs associated with financing and maintaining the property exceed the rental income received, then it is viewed as negatively geared which may assist with your tax planning. Be aware that you need to consider taxation issues such as capital gains tax and land tax. It’s imperative that you consult your accountant.
