Alright, let’s get straight to it. Buying your first home? You might think it’s your golden ticket to financial security. But hold onto your hats, because the numbers have a different story to tell.

The Reality of Home Ownership:

So, you’re ready to dive into the world of home ownership in Australia. Here’s the lowdown:

In short, there’s no tax break for just buying a place to live in.

But What About Investment Properties?

Now, here’s where things get interesting. The Aussie government likes it when folks invest and become less dependent on them later on. So, they’ve thrown in some perks for those who buy properties as investments.

Here’s the rundown:

Let’s paint a clearer picture. Say you buy an average Aussie property priced at $732,886. With a 6% interest rate, your yearly interest is about $43,973. On top of that, you’d be up for ongoing property costs (read rates, insurance, maintenance) of around $7,329 each year. So, you’re staring at an annual outgo of around $51,302. If this were an investment, and you rented it out, you’d probably get back roughly $29,315 a year. This means that as an investment the total cost to you total income ($29,315) less total costs ($51,302) is roughly $21,986.

The magic happens when you consider the tax deductions. Depending on your income bracket (let’s assume your tax rate is at least 32.5 per cent) you could receive $7145 back in tax. Not too shabby, right?

So, What’s the Final Word?

If you’re thinking of the same property as an investment versus a place to live, that $7,145 saved annually is pretty tempting. You could save it, invest it, or maybe even splurge a little (we won’t judge).

To buy or not to buy your dream home? It’s not just about following your heart; sometimes, it’s about following the numbers. Make sure they add up!

To discuss this in more detail talk to your local mortgage broker. We can help you run the numbers, look into rates, discuss your strategy and even connect you with other advisors.

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