Required when you are purchasing property for investment purposes. If you plan on receiving an income from your property purchase, this is the type of loan for you.
Many things about investment loans are different to how standard home loans work because they have more strict eligibility requirements. Investment Loans often require a lower loan-to-valuation ratio (LVR), meaning investors need to raise a larger deposit before applying for a loan. They also have a slightly higher interest rate on average than a residential home loan.
Expenses that you make for your investment property may be claimed as tax deductions to reduce your taxable rental income while you’re renting it out, and your capital gains tax if you sell the property.
The tax deductions you may be able to claim for an investment property include:
- Interest on the Investment Loan
- Home and Contents Insurance and Landlord Insurance
- Real Estate Agent’s commission
- Maintenance costs
- Council rates
- Decline in value of depreciating assets
- Construction costs (“capital works”)
- Travel expenses to the property to do an inspection, maintenance or repairs
(*Please note this is not taxation advise and we recommend you speak with your accountant for advice- don’t have an accountant? We can refer you to one of our trusted partners Contact us now)