Residential real estate accounts for more than half of the wealth held by Australian households, according to new data from CoreLogic RP Data.
Residential property accounts for $6 trillion of the value of the Australian investment market, three times as much as superannuation ($2 trillion) and four times as much as stocks ($1.5 trillion). Commercial property accounted for just $0.7 trillion.
These figures help explain why so many Australians, from ordinary couples to business bigwigs with bulging portfolios, prefer to spend on investment properties to grow their personal wealth.
Residential property is a low risk investment option which can pay significant dividends in the long term. As the local residential property market is so large, the Australian government is also sensitive to policies that might negatively affect home-grown investors, such as abolishing negative gearing. This adds extra protection for locals investing in residential properties.
Property investors are also eligible for significant tax benefits associated with negative gearing and depreciation. As even seemingly insignificant items like garden gnomes and cubby houses are subject to depreciation, some investors collect tax benefits equivalent to 60 percent of their property’s purchase price, according to Smart Property Investment. The publication also reported recently that Australian property investors often underestimate the value of legitimate tax deductions.
Whether you’re unsure you’re claiming all the tax deductions you’re entitled to, or you’d like to become a property investor, speak to the experts at Chase Edwards. Contact us today on 1300 854 833 to learn more growing your wealth through property investment and tax minimisation strategies.