A Finance blog by Paul Bennion.
Australia’s top income earners should consider investing in the buoyant property market as an effective way of reducing their tax liability and building long term wealth, recommends Paul Bennion, Managing Director of Australia’s leading tax depreciation company, DEPPRO.
Bennion’s advice follows the release of May 2012 figures from the Australian Bureau of Statistics (ABS) which show that people employed in the mining sector continue to lead the workforce in overall earnings and wages growth in Australia.
According to the ABS, people involved in mining earned more than twice the average Australian salary in May, with the average weekly wage for part time and full time mining sector employees reported as $2,274, compared with an average weekly wage of $1,053 for all employees in Australia.
The ABS figures also showed that in the past year, the average weekly wage for people working in the mining sector jumped by 7.6%, compared to an increase of just 3.7% for all employees.
To reduce their tax liabilities, Bennion recommends that high income earners consider the investment property market as a way to maximise their financial return.
“Buying investment properties is an effective way of reducing tax liabilities as well as creating long term personal wealth, but the reality is many top wage earners fail to maximise these benefits,” he said.
According to Bennion, the proportion of Australian home owners who own a second property as an investment is still relatively small.
“ABS figures show that even though around 70% of households in Australia are home owners, only 21% or around one in five households own a property other than their home. And, of those high income earners who do purchase properties, many overlook the important tax benefits of owning an investment property,” he said.
“All residential investors should make use of the tax depreciation entitlements available on investment properties by seeking the services of a professional depreciation company like DEPPRO,” Bennion said.
Tax depreciation entitlements can equate to well over $100,000 for an average residential investment property if an accurate depreciation schedule is completed.