Your choice of investment structure can save you a lot on taxes. Available structures include self-managed superannuation funds (SMSFs), family or unit trusts and companies, as well as holding property individually or in joint names.
When a rental property is purchased in your own name, you can take advantage of negative gearing which effectively lowers your taxable income and reduces tax. If the property is held longer than 12 months, individuals are eligible for the 50 per cent general discount on capital gains, effectively halving the amount of capital gain you will pay tax on.
This article first appeared in the 2015 Master Builders Western Australia magazine July-August edition.