Tax Strategies fall into one of these categories. A taxpayer may find that ultilising as many of these as possible may work (or just push the problem to next year )
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- Not receiving income. (ie Steele's decision).
- Deferring income
- Prepaying expenses
- Offset a profit against another deductible / loss
- Timing differences
- Non-cashflow deductions
In the case of many IP owners the fourth strategy often seems to be relevant. When the IP turns +ve geared they buy another, and another.
Deferring income doesn't really work with an IP. Prepaying expenses is limited usually to interest and it provides a one year benefit. Therafter every other year it must be repeated or a major tax problem occurs.
The fifth one - Timing differences relates to PAYG Variations. Bring fwd the annual tax benefit to a reduced tax on salary each fortnight or month. My view is you only part claim it. Leave a small / reduced refund at year end and not a debt.
The final one is important. Get a QS report or have one confirm its not worth the effort. And claim borrowing expenses correctly. Another hidden one is deductions available when you buy. The lawyers settlement sheet may include a share of land tax, rates etc...
Almost missed one - Use a good property savvy tax adviser.