Ever heard of Government Approved Incentives? They are financial incentives to help everyday Australians build a better life.
For aspiring homeowners, the government provides financial assistance to help first home buyers get into the market. These incentives tend to be grants/rebates and other forms of guarantees.
For investors, it’s a different incentive. The government wishes to encourage investment in property to add to the housing supply, as we discussed earlier ,
supporting the rental population and helping with rental affordability.
The government encourages this investment by providing tax incentives to investors.
What Government Approved Incentives are available to me?
The incentives available to you is entirely down to your eligibility in the state you are applying in. I’ll go into more detail on each of these in the next section: taxation basics.
However, incentives available can be loosely broken down in the below:
Aspiring Homeowners
· Grants and rebates
· Stamp duty savings
· Government guarantees to banks
Aspiring Investors
· Reduced taxation rates
· Negative Gearing
What is Negative Gearing?
Negative gearing is where the Australian tax office allows you to write off expenses incurred from investing in property against your taxable income – therefore reducing the amount of tax you pay. In effect – the government is partially paying off your investment.
It’s important to note that cash flow and government approved incentives (negative gearing) are completely different concepts.
An investor can have a cash flow positive property, and still claim benefits through negative gearing.
How can I use these government approved incentives?
Aspiring homeowners can access these incentives through applications with their relevant state and/or federal government.
A smart investor can use government approved incentives to change a negative cash flowed property into a positive one. Further details on these incentives are provided in the tax section.
If you are unsure on how to maximise the government approved incentives that may be available to you – speak with us in the chat.
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SUMMARY
The government encourages Australians to build more homes and add to the housing supply by providing grants to aspiring homeowners and tax incentives to investors. We call these ‘government approved incentives’. One of these biggest incentives is called government supported income; however, you may have heard it by another name – negative gearing. It basically means there are tax rebates provided to the investor through expenses incurred from holding the investment property.
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