Tax Strategies

• All income must be disclosed to the ATO — including salary, investments, and overseas income.

• Australia uses a marginal tax rate system: the more you earn, the higher your tax rate.

• Current individual tax rates (FY 2025–26):

  • $0–$18,200 → Tax-free

  • $18,201–$45,000 → 16%

  • $45,001–$135,000 → 30%

  • $135,001–$190,000 → 37%

  • $190,000+ → 45%

Three Powerful Tax-Saving Strategies

1. Salary Sacrifice

• Redirect part of your pre-tax income into superannuation.

• Super is taxed at only 15%, compared to up to 45% in personal income tax.

• Example: Contributing $20,000 could save ~$9,000 in tax yearly.

• Note: Funds in super can’t be accessed until retirement.

2. Salary Packaging

• Use pre-tax income for approved expenses like vehicles or other benefits.

• Requires employer approval (often via companies like Novated Lease providers).

• Similar tax benefit to salary sacrifice.

3. Negative Gearing

• Offset losses from investment property expenses against salary income.

• Especially effective for high-income earners.

• Example: Owning 1–2 investment properties can lead to $1,800–$7,700 in annual tax savings, depending on income and borrowing level.

Depreciation Benefits for Property Investors

• Brand-new properties offer the greatest depreciation deductions.

• Two main types:

  • Division 43: Flat 2.5% on building construction.

  • Division 40: For fixtures/fittings (e.g., appliances), using a diminishing value method for higher first-year claims.

• Properties purchased after May 8, 2017 can only claim Division 40 on new builds, not second-hand ones.

• This makes off-the-plan and new developments highly tax-effective investments.

ACT Leasehold Properties Advantage

• In the ACT, stamp duty on leasehold land can be claimed 100% as a deduction in the first rental year — a big upfront tax benefit.

Property Market & Cashflow Insights

• Many brand-new developments now deliver positive cashflow due to:

  • Developer finance rates around 4%,

  • Rental yields at 5–6%,

  • High depreciation claims.

• This creates an ideal setup for investors seeking both income and tax efficiency.