Updated: Oct 2, 2019
As the 2019 tax season starts to wind down we have a bit more time on our hands at GR8 FIFO so we thought we would put it to good use by keeping all our FIFO clients informed on matters that are financially relevant to FIFO Workers
Property Investment is Back in Business
Records for WA property growth confirm the market has been treading water or perhaps even going backwards since around 2008. That’s probably a result of:
Property values overshooting the mark when they exploded between 2000 & 2006
A massive influx of new housing product around the same time as the mining construction boom came to an end
Sizable contraction in the WA economy
Stagnant population growth in WA
Well the numbers today suggest that things have flipped on their head and property investment is back on the agenda, evidenced by:
Mining and mine expansions booming again with billions upon Billions of new mines in construction & coming online as well as expansions at existing mine sites
Shipments through Port Hedland have already surpassed the greatest tonnage for any year ever recorded (as at 31st August 2019)
Jobs, jobs and more jobs, employers are struggling to find the workers they need and they are flooding into WA to fill this vacuum.
Rental vacancy rates have fallen to their lowest point in 6 years, dropping from around 8% a year ago to just under 2% today….. less houses & accommodation available means rents will rise soon
Population growth is on the rebound as workers flood back into WA to fill the jobs. Projections are for a 60,000 growth in net population in 2020
Annual new dwelling approvals to 30th June 2019 at 14,000 compared with 38,000 5 years ago… less dwellings being produced
So, in summary, we have less houses being supplied, more people needing them and not many available to meet the tidal wave of demand that’s just around the corner. It's looking like the early 2000’s all over again.
Its unlikely that any other investment in your lifetime will generate the level of tax deductions that you can achieve with a well thought through investment property strategy.
All expenses associated with the ownership of an investment property are potential tax deductions. What's not in question is all the cash expenses associated with an investment property that include the interest charged on borrowings, council & water rates, Insurances, maintenance and you’re your property manager's fees are all deductible expenses. Then there is “NON CASH” deductions for the depreciation of the property and everything that’s in it. It's not unrealistic to expect as much as $40,000 in tax deductions for a well finished, run of the mill 4 X 2 family home.
With the Liberal Morrison Government returned at the Polls it became pretty clear that Negative Gearing is here to stay for at least a few more election cycles. The labour party analysis of their defeat highlighted this as a key point for their failure at the election so it's unlikely they will be looking to roll out that old chestnut again any time soon, so Australian can invest with confidence again in property.