STEPHEN SAYS

20th February '10

Over the past few weeks I have been fielding a number of calls about what the new tax changes might mean.  It looks likely property investors will no longer be able to claim depreciation as an expense and in turn receive a tax rebate.  What this means to an average Horncastle investor is approx an extra $50pw they will need to cash flow. This could well be off-set through the proposed changes to personal tax rates.  It is important to understand that under current tax legislation, investors must pay back over claims of depreciation anyway. I think all property investors breathed a sigh of relief with the news there will be no capital gains or land tax.  Property ownership as a form of investment will continue to be the most preferred type of investment due to its stability and long term income streams and capital growth.  The banks certainly will not lend you money to invest in shares or managed funds so that in itself tells you something. My advice to clients has always been not to purchase investments because of tax benefits.  The goal is to achieve increase in wealth by making best use of your home equity but with a balance on risk and return.  Property might have its ups and downs but over time it has a strong history of better returns when weighed against the risks of other investment types.  As always I am available to answer any questions; give me a call if you need some balanced guidance.  Have a great weekend.