When buying an investment property it is important to see your accountant first. Often buyers get a building inspection report and a pest inspection report prior to buying their property but they don’t make an appointment to see their accountant, which is arguably the most valuable appointment to make and could potentially save you tens of thousands of dollars.
The issues that should be discussed with your accountant are:
- Capital Gains Tax – who should own the property and for how long?
- Depreciation – will there be any, if so when do you need the report?
- Positive gearing and negative gearing – what are the tax benefits and how will the cash flow affect your weekly living expenses?
- Investment strategy – Do you have one?
- Rent – What is the current rental market and much rent will I get?
These are a few issues to discuss with your accountant. There a multitude of property spruikers in the market today offering all sorts of amazing investment opportunities that seem too good to be true. Another benefit of speaking with your accountant will be to get information and advice that will be factual and realistic.
Some accounting firms market themselves as property experts and as such charge a premium fee for giving similar advice as your local accountant. If you don’t already have an accountant shop around and find an accountant that you feel comfortable with. Always seek the advice of your accountant before you start looking at property.
Mark Vernal, Success Tax Professionals Rockingham