Are you an expat searching for an investment opportunity? Are you looking for an investment which generates high returns in a politically stable environment? Stop searching – investing in Australian property could be your answer.
With a land mass equal to the US and only a tenth of the population, it’s no wonder Australia is one of APEC’s premier investment destinations.
Five reasons you should consider investing in Australian property
Here are the top five reasons you should consider investing in Australian property:
1. Major population growth
Australia is renowned for steady population growth. In fact, the country gains a new citizen every 77 seconds. Currently, Australia is home to over 24.7 million people, and this number is predicted to expand to 40 million in the next 40 years.
2. CBD opportunity
Government research estimates a major increase in Australian households within the next 25 years. As of 2017, there are over 9.9 million households in Australia. By 2031, this number is expected to balloon to 11.8 million. This expected increase in households will lead to more homes being built away from CBD areas. Therefore, well-positioned properties located within the CBDs of major cities will dramatically increase in value, as living near CBD areas is very desirable.
3. Above average returns
Over the last 40 years, the Australian property market has enjoyed consistent growth, with an annual growth rate of 7% per annum. In addition, the doubling of property value each 7-10 years, coupled with the significant leverage property investment offers, equals a major return on investment (ROI).
Depreciation is the decrease in value of your property (either the building itself or its contents). Although the 2017 brought in changes limiting depreciation deductions, depreciation can still be claimed. In fact, you can claim still claim depreciation on any new assets (fixtures & fittings, equipment etc) that you have purchased for your investment property. The depreciation that you claim will be offset against the money you are earning from the investment each financial year, thus reducing your overall taxation liability.
5. Negative gearing
One of the most significant tax advantages offered to those investing in Australian property is negative gearing. Under this arrangement, any money you lose in your investment property, you may claim back against the tax you have paid through your employer or other investments.
Ultimately, for every dollar you earn, you’ll get some tax back. This means you’re losing less money and require less growth in the property to earn a profit.
For more benefits of investing in Australian property, and to find out how these benefits can work for you, contact the expert team at Expat Tax Services today.