Rupert Posted February 12, 2013 Share Posted February 12, 2013 But this just isn't true. A tradesman that doesn't claim back (i.e. make a tax deduction) for the cost of his vehicle or tools is missing out on money - regardless of his income. Quite clearly he meant overall. It amazes me that some people delight in making losses because they get an overall tax credit. It is better to make a profit and pay taxes. Rule number one of any business model. Link to comment Share on other sites More sharing options...
northshorepom Posted February 12, 2013 Share Posted February 12, 2013 Quite clearly he meant overall. It amazes me that some people delight in making losses because they get an overall tax credit. It is better to make a profit and pay taxes. Rule number one of any business model. It's even better to make a profit and pay no tax from a pure commercial PoV. And some people/companies can find relatively easy ways of doing so, particularly when it comes to private companies. Link to comment Share on other sites More sharing options...
Eera Posted February 13, 2013 Share Posted February 13, 2013 Its not a myth, the idea is you make a capital gain on an appreciating asset.It is only worthwhile if you end up selling the asset for a big enough gain to make up for the annual losses. Not sure if you know but it is not restricted to houses. You can similarly negatively gear against a portfolio of shares. If they go up in value more than your interest payments it is worthwhile. But you are way better off positively gearing if you can; it's still better to be paying tax on income AND having an appreciating asset. I've got four properties, all of which are positively geared and are income producing through good selection in in-demand areas, there's been a downturn in the rental market recently and I've had to drop rent but it hasn't affected me as they are still positive to neutral geared and I'm not losing anything. Link to comment Share on other sites More sharing options...
buzzy--bee Posted February 13, 2013 Share Posted February 13, 2013 I've got four properties, all of which are positively geared Were they positively geared on the day you bought them? BB Link to comment Share on other sites More sharing options...
craigyboy Posted February 13, 2013 Share Posted February 13, 2013 Hi, up doing some research into housing on realestate.com.au. How is it that rent is so much cheaper than buying? Are there lots of you just renting and never planning on buying. Looking at Established suburbs in Melbourne about 20mins drive from the city, I can rent a 3 bedroom for $400 a week. To buy a simular house in the same area, using the mortgague calculator provided down the bottom of the page, its saying it would cost nearly $3000 a month to service the required $400,000 + loan. Its over $1000 cheaper a month to rent and thats before you factor in stamp duty/council tax/rates etc. It would seem its far more sensible to buy something in the UK, rent it out (at a profit), then rent forever in Australia while the UK house pays itself off.. Rents dont seem to adjust that much either, I can move to a beachside suburb and rents are only a tad more, yet the houses go up to 500,000 and an even more expensive repayment plan. The reason renting is cheaper, is that in many cases the Ozzies have negativ gearing. Unlike her in the UK an investment property cannot be offset against your personal tax/ whereas in oz if you earn 1000 and your tax is 400/ interest from your investment property is offset against your personal tax. Thus enabling the rentAl property interest payments in many cases to be removed and thus reducing the rent. Link to comment Share on other sites More sharing options...
whichway1 Posted February 13, 2013 Share Posted February 13, 2013 I lived on the gold coast and I thought rent was extortionate! Sent from my GT-P5110 using Tapatalk 2 Link to comment Share on other sites More sharing options...
rikyuu Posted February 15, 2013 Share Posted February 15, 2013 Hi, up doing some research into housing on realestate.com.au. How is it that rent is so much cheaper than buying? Are there lots of you just renting and never planning on buying. Looking at Established suburbs in Melbourne about 20mins drive from the city, I can rent a 3 bedroom for $400 a week. To buy a simular house in the same area, using the mortgague calculator provided down the bottom of the page, its saying it would cost nearly $3000 a month to service the required $400,000 + loan. Its over $1000 cheaper a month to rent and thats before you factor in stamp duty/council tax/rates etc. It would seem its far more sensible to buy something in the UK, rent it out (at a profit), then rent forever in Australia while the UK house pays itself off.. Rents dont seem to adjust that much either, I can move to a beachside suburb and rents are only a tad more, yet the houses go up to 500,000 and an even more expensive repayment plan. You do get a lot for your money renting in the outer suburbs, particularly in the west. We rent a huge 4 year old, 4 bed house, ensuite, WIR, walk in pantry, double garage, 600sqm land for 350pw approx 1560pm, about 30km from CBD in a very nice area. Next door just sold for $470k, the mortgage would be 3000pm and house prices are dropping anyway. Our rent went up 1.4% last year. Our previous house in a new estate in Deer Park was brand new, similar size for 320pw. Link to comment Share on other sites More sharing options...
Emil Burrows Posted March 15, 2013 Share Posted March 15, 2013 Hello, Let’s look at some figures and then decide what is more advantageous. 500$/week would be the rent price for a decent place, while in order to buy that place you would need approx. $500,000. That means that 19 years of rent are equivalent of the amount you need to become the owner of the house. According to your mortgage calculator, you could become owner after 13 years. I don’t know about you, but I’d rather pay a reasonable monthly amount for 13 years for something that will be mine in the end, than pay the same sum for 19 years and then continue to pay, because I won’t have a place of my own. Rent is a good choice if your stay is temporary, but still, you can always use your property for investment purposes, even if you decide to leave town. Cheers, Emil Sunbuild Invest Link to comment Share on other sites More sharing options...
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