Hi guys. I settled on my first investment property in November last year. The loan amount is 429000 at a rate of 4.6%. I earn about $155000 a year. Can someone please tell me roughly how much tax return I would get back on the intrest payed? Dumb question I know but I'm not quite sure how to work it out. Thanks in advance.
Need to know other figures to calculate: 1. rental income 2. PM fees 3. outgoings (rates, insurance etc) 4. depreciation The Y-man
Rental income is $350 per week. It's self managed. Rates are $500pq and insurance all up is $1500 pa. I haven't had a depreciation report done as the house was built in the 50s and I'm not sure there would be much depreciation?
As a crude rule of thumb : Work out annual rent income and deduct cash outflow (payments) ensuring you only include interest and not amount paid over and above interest. Then deduct quantity surveyor deductions. Then take 1/3rd of that number as the potential refund. Adjust for part year pro-rata for any new property too. Get a QS to advise if its not worth getting a report. $1K or $2K pa as a deduction (plus) is normal for a old property that people think has no depreciation.
Awesome. Thanks that's perfect. Only after a ballpark figure so I can roughly work things out for further purchases.
If I've done the figures correctly, based on that and assuming zero depreciation and no vacancy, you'd be cash flow neutral - no tax deduction. If you had 1 month vacancy in there, you'd get a massive $112.55 tax relief..... The Y-man
