Wealth Coffee Chats

Reduce your taxes significantly!

Good morning, morning all. Jason here. Up for a coffee and a chat this morning. Hopefully everyone's well. A but chilly in my neck of the woods, probably not as cold as down South as it's been for a little while, but anyway, got my Mr Happy on and a nice cup of coffee. It's coming to that time of the year, end of the financial year. And last night I had a good catch up with our property investment crew, our mentoring program. We talked about minimizing taxes. Hey, listen, it's not about how much you make, it's about how much you keep. And as a property investor, we're exposed to significant amount. Morning, Trina. A significant amount of taxes. And if you're smart, if you're smart, you can reduce them significantly. One of the major benefits to owning real estate is a thing called depreciation. So depreciation, for those who own property in their own names, I think most people should own property in their own names because it's very efficient. You can get your taxes down to single digits. So, imagine this. Imagine you're making 100, 150, $200,000. Imagine instead of paying 35, 40, 45 cents in the dollar, imagine paying 5 cents in the dollar for taxes. Would that be all right? What do you reckon about that? And that's the fantastic thing about owning real estate. Now, a lot of people get confused here. You get all these tinpot turkeys carrying on about oh, negative gearing and all this sort of stuff. Those idiots don't know what they're talking about. They don't know their rear from their arse hole. And at the end of the day, if they don't want their tax deductions, then give them to me, I'll have them. At the end of the day, here's the drill. A tax deduction, for you as a property investor, or you who own a property, is a very normal, natural perfectly legitimate thing. Claim the bloody things, you guys. And when you claim your taxes back weekly, fortnightly and monthly, it's called a PAYG variation. You can use that extra cashflow, it's real money in your pocket. Morning, Jase, how are you bud? Catherine, how are you guys? This is a bit of a repeat from last night. You can use that money for saving for deposits, paying off debt, all sorts of stuff. Now, a lot of people don't have spare cash flow because their life is finely tuned. What I always say is you've got wasted cashflow. Wasted cashflow you're giving to the ATO. Cashflow for most people is the money you're putting into super. If you're not taking care of it yourself. Wasting cashflow, in my world, is a principle and interest payment on your home loan in the acquisition stage. Right, in the acquisition stage, why pay your home off if you're trying to buy properties? That's not the point. Morning, Tim. So minimizing your taxes. The point is to keep more of that money, gang. And so what are the big four taxes, the big for taxes? PAYG, your everyday tax that you pay on earnings. Stamp duty. Stamp duty as property investor. Capital gains tax, as a property investor. And also, land tax, as a property investor. Now, for anyone listening in or anyone watching, there's a surefire way of never ever, ever to pay capital gains tax as a property investor. Anyone know what it is? Chuck it in the chat, if you're there . Anyone listening in, if you got a question, chuck it in the chat. Happy to have a bit of a yam this morning. But listen, the number one, surefire way of not to pay any capital gains tax as a property investor is don't bloody sell your properties. Why would you sell them if you bought them? I don't understand that sort of thing, but really, for some of us, we might have it in our strategy. I have coached people about selling and upgrading their properties. But the big four, your income taxes, your PAYG. Land tax. Stamp duty. Capital gains tax, how do we minimize it? Number one, PAYG, when you own a property, you can claim your taxes back, it's called depreciation. You don't have to have a negative cashflow, you don't have to lose cash to claim your taxes. Own brand new property gives you fantastic tax deductions and claim back weekly, fortnightly and monthly, guys. At the end of the day, if you've left money with the ATO, or let's say this, if you owe the ATO money, they're gonna charge you interest. And then, you leave your taxes with ATO all year and then you claim it back at the end of the year and they pay no interest? It's ludicrous, it's insane, all right. If you don't know what I'm talking about, shout out to us, we'll point you to the right direction. Come on to one of our property investment nights. So, PAYG taxes, claim your taxes back weekly, fortnightly, monthly in your pay pack, it's called PAYG variation. Now, how do you minimize stamp duty? Well, stamp duty, the cost of stamp duty is different in each state and anyone listening in last night, we talked about this in our mentoring last night. The lull of stamp duty in the country is in the ICT and you can claim the stamp duty and the ICT as a tax deduction first year. That's crazy, the politicians look after themselves, huh? So, different states have different stamp duty so think about that. The difference can be sort of five to $10,000 in different states. Also, if you purchase a house and land package, if you build a house, you only pay stamp duty on the land, not on the house. So that's another way of significantly saving on stamp duty. In some case, 50, 60% saving on the end value of the property. A brand new property, low stamp duty. I like that, we love building houses, we think they're great. Land tax, how do you minimize land tax? Number one, you buy in different states. Because there's a threshold in your name in each of the states, and if you buy three or four properties in different states, you'll end up with a zero land tax. But if you own them all in one state, you'll end up paying land tax, which is ludicrous, it's a lot of money out of your pocket, longterm. And as your values go up, get this, you buy now and then your values go up, you're like oh, I like Victoria. I live here, I'm gonna all buy in Victoria. Well, then, when you're gonna retire, Victoria is gonna take 20 to $30,000 of land tax out each year. It's dumb, okay. It's not smart, as a property investor, to buy everything in one area. There's many reasons why, the risk is too high. You should, at least, have three different states and at least two types of properties. Houses and apartments, I like. A good mix of both ends. But another way to minimize the land tax is to buy apartments, not houses. The land content is less in the future, often if you buy the right apartment, the rental will be more and the expenses will be less. Mm, yeah. That's popping in the oven there, isn't it? Isn't it property, isn't houses better, Jason? Well, depends what better means to you. Do you want more cashflow when you're retired. Who cares what your property's bloody worth, as long as it's producing cashflow. So, do you want more taxes because you own more land? Or do you want more income because you own better income-producing assets? You answer the question because I know what I like and in my future, I'm gonna have lots of assets with a lot of land content, but high income capability and the values will be still pretty good. So where did we get to? Land tax. We've done stamp duty, we've done PAYG. Capital gains tax, the last one, the big Kahuna. Listen, I don't think you should sell, but if you do sell, there's ways to minimize that obviously. Own a property more than 12 months and then you get a deduction, a 50% deduction of capital gains tax if you do sell. Owning your own home, place of residence, capital gains tax free. It's one of the only reasons I encourage people to own a PPR, Principal Private Residence. If you own , super, okay. In accumulation phase which is when you're not retired, capital gains tax is charged at 10% or tax is charged at 10%. And if in retirement, capital gains tax is zero. That's pretty good. Now there's some good reasons to make sure you've got enough assets in your super, that's for sure. And last, but not least, for business owners. Aren't there any business owners listening in today? If you own a property, if you buy a property for your business that you run your business from and you have owned your business for 15 years or more and you sell that property, you can include that property in the small business, capital gains tax concession, which is two million dollars. So, technically you can sell your property for two million bucks, capital gains tax free. Get that one, business owners, you should have that on your radar every day of the week. A lot of business owners make a mistake and accountants do this as well, where they go and buy the property in the super, for the business, which is great but then, you miss out on the capital gains tax free concession two million bucks external super. All right, so, I've got strategies around that which I think are smarter, but hey, listen. The end of the day, the idea game is to minimize your taxes, be smart about thinking into the future about what am I going to do and what is going to be the expenses, the cost of that, as a property investor, because it's about how much you keep, not about how much you make. Cause if you can keep more than anyone else, if you can be more efficient than anyone else, you're left with a compounding effect of wealth, cashflow, income, value in the future which will set you up very comfortably, very nicely for the life you wanna live. All right, that's about it this morning with chatting about taxes. There's so much more to chat about in that sort of stuff and all of you, I know there's a few of you guys in the mentoring program, so if you didn't come last night, if you didn't come last night, I recorded a whole hour and a half on this last night. Ladies and gents, if you're in the mentoring program, go to the positive mentor portal and you'll the recording from last night. It was a cracker. For those who are in mentoring, you should bloody join. It's fantastic . I'm a bit biased, but there you go. Anyway, thanks for tuning in, gang. Hopefully everyone's well, stay well. Have a great day and, listen, if you wanna catch up or lost track, stay on. Facebook, website, whatever. Come along to one of our events and listen in a little bit more. All right, hopefully everyone's well. Take care, thanks for dialing in, you guys. Hey, Kels, from up in Townsville. Michael, how are you, mate? All right, adios everybody, bye bye.

4 ways to get Capital Gains Tax Free

Good morning. Morning everyone. Morning, morning, Jason here. Hoping everyone had a good weekend. I certainly did, had a nice relaxing one. I hope you did too. Hey listen, today I want to talk about capital gains tax and capital gains tax is one of those taxes or calculations as a property investor that you know is the the big boogeyman. If you ever sell your property, you're always like, " well, how much capital gains tax am I going to pay?" Well, Here is four ways, four ways You can have zero, zero capital gains tax no capital gains tax as a property investor. And I was just thinking on the four of them maybe five. Well, there's one way you can never never pay capital gains tax and that's never sell, never, never, ever sell. But for those of us who are monopolized for those who I've asked who are at a point where we're either sometimes forced to sell or sometimes planning on selling, we need to be smart about that. We need to understand how we can minimize those taxes, maximize the gains for ourselves and our family and our future and our wealth. So yeah, four ways to have capital gains tax at a zero calculation for you as a property owner. Number one, everybody should know this one your home, your owner occupied property, owner occupied property is capital gains tax free. The house that you live in. I do know a fair few people who have an owner occupier upgrade strategy. I really liked the owner occupied upgrade strategy where you buy a nice house, a nice area and whatever, whatever budget you can afford at that point in time. And over the years often it's usually between three and four times you do an owner occupier upgrade from one style of property and area to another style of property in an area. Every six to 10 years is a good timeframe. If you want to be in that owner occupier upgrade, there's no cost to you from a tax point of view. If you buy and sell your owner occupied property. Now, if you do it in under 12 months and do it all the time the ATI will sort of think you, sniff that one out, but three times over 30 years upgrade fantastic capital gains tax free. You go from a property-owning a property in that, where let's say we started out right now. Let's use this as an example. Most people can't afford most people on, maybe a Julian income can afford 500[Inaudible] property. So you buy that at whatever level you're at. You stay there for five to 10 years. You might add some value. You might fix it up, I like people to do that. Once that property goes up in value, you can sell that property, take the profits. Your family might grow, your style might change. And then you upgrade to another property and you do that three times. Okay. So number one, owner occupied property. Number two capital gains tax free property is when you own a property with your super, okay, a self managed super quickly. And There's some tricks and ways to get that right You should talk to a financial planner about owning a property in your super save as appropriate for you. But if you do own a property in your super or any asset in your super, when you put that super fund into retirement phase, there's a accumulation phase. And there's a retirement phase. When it's in a retirement phase, you can sell a property inside a super fund capital gains tax free, zero tax which is pretty sweet. Another thing that's amazing about owning assets in a super fund, I'm a big fan of that. I think everyone as a property investor should build their assets inside and outside of super, in retirement your income that comes from your super so in the retirement phase is tax free as well. So no income tax and no capital gains tax under a threshold at this point of 1.6 million you put a couple together that's $3.2 million worth of assets owned for you. Capital gains tax free, income tax free. Absolutely crazy spot on place to own assets. So that's another place that you can own an asset capital gains tax free If you ever had to sell it. We work with a couple of very smart financial planners who do some very clever things when it comes to buying and selling real estate and beefing up and funding and growing your super at the appropriate time. If anyone ever wants to find out more about that, track us on and come and have a chat. We'll introduce you to the right people that we know who like real estate and are great financial planners. Now, number three, number three, the third place you can have a capital gains tax free property as an investor or a property owner is a little bit of a trick one but this is for all the business owners listening in, all the business owners listening in again, you can own a property that you run your business from, and that property, if you qualify for the small business capital gains tax concession of 2 million, there's a few little qualification questions you have to have been in business for over 15 years and so on. But the property that you own and run your business from can be a capital gains tax free, If it's deemed the asset of the business because you have a $2 million threshold to sell the business and that $2 million is capital gains tax free. Why is it $2 million capital gains tax free for business owners? Well, by large, small to medium business owners that have businesses less valued less than $2 million, You guys, we guys, all of us, a very average if not terrible at contributing to your super when you pay yourself and the government has said well, listen, I know you won't, you don't pay yourself very much into your super if any here have cyl a tax free style asset into the future. If you sell your business, which includes the property the real property that you run your business from, then that can be capital gains tax free up to $2 million bucks. So that's fantastic. So three places, capital gains tax free ownership, your name in a super and a business that owns a property that they run from. What's the fourth one. It's a bit of a trick one, I aside this one all the time, but it is an actual fact, it is for real. If you are a politician, if you're a politician and you have to go to Canberra and whatever, then you can have two, that's right two capita gains Tax-free principal, places of residence. How's that? Alright. The polys they look after themselves, don't they? they all campaign for us to have, get rid of negative gearing and all this rubbish but now they're going to have two capital gains tax free properties for themselves. Yeah. What a bunch of lunatics. Anyway, there you go. That's a trick one. So three real ones. And the fourth one if you want to go to become a politician, but I don't think that that would be one of the ones that are choose to go and do. A couple little tricks in their , not tricks facts. If you move out of your own home and rent it out, you have got six years, gang, six years. If you move out of a printer place of residence, rent it out, go rent somewhere else. For whatever reason you might travel overseas you might, you might move into state for two or three years. For some reason you might just move around the corner for a few years for some reason, and rent capital gains tax free. That property stays capital gains tax free for six years, six years And that, which is awesome. So you can move back in it starts again, or you can sell that property capital gains tax free six years later which is, which is excellent. So keep it on that one. That was an excellent little concept. And the other one is if you do move out of that property, move by and move into another Prince place of residence. There's a two year rollover gap between that one and the other one. So for selling the Prince place residence. So hopefully that'S useful gang, as property investors We want to make sure that we end up keeping the money we create. That's important obviously. And the more you keep the more wealth you create for your future and taxes are one of those things if you structure yourself well, you manage it properly, then you can keep more than others who aren't structuring themselves well. And that often makes all the difference into the future for what tax minimization. Another little, one little bit of a tidbit a Canberra,[Inaudible] just that they would get rid of stamp duty fell under $500,000 properties and which is brilliant for both first home buyers and investors, which is fantastic. There's not that many $500,000 properties around in Canberra, but anyway, there you go okay, is going to stimulate their property market. And also you can get a discount between 500 and, and a $750,000 pretty well a 50% discount on the stamp duty. So that's interesting that popped out. Anyway hopefully it runs well. And if some of those concepts are settling with you and you go, well, I want to find out more track us down. Listen at one of our webinars, you can jump on our Facebook page, send us a message, whatever it is happy to chat to you guys at any time. All right. Hopefully everyone is well thanks for darling in of coffee and a chat. And see you tomorrow about the same time for another coffee and another chat, take care, stay well and buff it out. Cheers gang.

How many properties do you need

Good morning gang. Good morning, Monday, fresh start to the week. Monday morning, it is a little bit chilly here today, John, if you're listening in maybe not as chilly as Melbourne, but a bit cold, but good morning, everybody. Welcome to the week. A quick question for you today. How many properties do you need, how many properties do you need to retire on or create the passive income that you want as a property investor? How many properties do you need to create that income that's gonna get you what you want some point in the future. I've said this a few times before, morning trainer, you know, and I think I've talked about it last week, the three stages of property investing, acquisitions, the buying, the consolidation, the keeping, the fixing, the maintaining, and then the lifestyle, the transition into, you know, whatever that might be for you. Might be for you from a passive income or cashflow, whatever it might be, how many properties do you need? How do you go about calculating that? It's quite a simple process from a big picture, point of view, you add up the rents, the rent, and then you take a look at how much passive income that you want into the future and, you know, add them together. And that might be three properties, it might be four properties, it might be five properties. The challenge is for most of us, it is debt-free property, debt-free property, morning to your trainer. Debt-free property that you want. So then remember the first stage is acquisition. Okay, if I need five properties to generate $125,000 worth of income, rental income, then that's what I go about doing. I go about acquiring and purchasing those five properties. Now, remembering when we have our investment properties over time, those rents will go up over the next 10, 15 years, those rents will go up. Now, a lot of people think that they will double and by large statistically, the rents will not double. The values often double, the rent do not double. So they go up another 50%, half, okay. Morning Alex, morning Patrick. So by large, the stats show. So if you buy something and it's renting for 500 bucks a week now, in 10 years time, it should be renting for 750 to 800 bucks a week rent. That's usually what the stats show. Now there is an anomaly in this, and this is where we come under a little bit of scrutiny often where I recommend lots of apartments for your cashflow in the future, rather than houses, because houses' rent grow slower than apartments' do closer to the CBD. You can go check these stats out yourself, a property, one to two K from the CBD where there's employment, there's cafes, there's restaurants, those rents have statically grown stronger than houses in the past. Give you an example, in Sydney, we had our clients buy properties in a place called Ropes Crossing $200,000 houses just after the GFC, which were renting for 600 bucks a week. Very strong, very nice. And one bedroom apartment in Sydney, in Redfern, $600,000 apartment, a few years after the GFC. And which one do you reckon today? Rents for $1,200 a week. I've already given you the answer, I've given away the answer, but it's certainly not the house in Ropes Crossing. The house in Ropes Crossing is just worth under a million bucks. The same with apartment we had the value, not so long ago, just under a million bucks as well, but the apartment, one bedroom rent for 1,200 bucks a week compared to the house only rent for 850 at Ropes Crossing. So for me, if you're looking, how many properties do I need in the future? The question becomes which properties, what type of properties? Because houses will have less net cash flow, than apartments, which area, location, infrastructure do you want them in? And so how much debt-free do you want those properties as well? Because here's the drill, right? But most of us, we're not gonna pay them off a hundred percent until very late in life if ever. I'm not, I don't believe that you should pay completely debt reduced the properties a hundred percent. I reckon about a 40-50% LVR is about the right number. Whenever I've done my mathematics and done the analysis on our cashflow tools are 50% LVR and your rent's going up 50%. Boom, there you are. You've got your positive cashflow like there's no tomorrow. So guys just wanted to sort of touch base and would you have to think about that. If you want to work out the cash flows, we've got a little free calculator, free cashflow calculator hit us up, hit me up in the chat below. Say yeah, Jace or something like that. And I'll send you out the, I'll get you the link to the cashflow calculator. How many properties do you need? Add up the rents, go about purchasing those. That's the first stage. Don't worry about debt reduction yet. Don't worry about the positive cashflow of those properties yet. None of that rubbish because you can't confuse the acquisitions, the buying with the owning, okay? Because they're two different behaviors. They're two different economic outcomes at this point in time. And so buy the properties you want, and then later on, we can decide to debt reduce or add value to increase the rent, okay? And this is so you can renovate the rent goes up or you can debt reduce the rent goes down and then the net result becomes your positive cash flow in your pocket as you go. Now, I always say to people, listen, if you've got a good super contribution strategy, if you're smart with your super, if you're contributing to your super then in a good way, okay. Jace, no worries, Peter, if you're contributing to your super over, you know, 30, 40 years of work, and you're smart about what you buy, your super should take care of at least two days of your 2-3 income that you want in your future. And I say your property investments will take care of the other two to three days of your property in cashflow for your retirement in the future. What we do say to people, if they wanna retire early, if they wanna start darling back is I aim to buy back for your own sanity, buy back a Monday or a Friday gang. It's pretty amazing if you have a three day week, a three day weekend, or a four day weekend, how much more energy and interest in life, you have going the distance working an extra, you know, three days a week or whatever it is. But anyway, a few people shout it out for the calculator. So that's no problem I'll get that out to you. Jason and Neil asked, do you report on advice on towns? If so, how much? Jason we have a membership. It's called a lifetime mentoring program mate. We've got coaches all around Australia. Maybe we've got a couple of webinars on this week mate. So if you want to check those out, you can chat to one of the coaches and work out what program might be right for your brother. So may track us down pretty easy to find us on the Facebook page. You'll see events wherever you are, wherever you live. Just jump on one of those, might have a listening to the coach. They'll be able to tell you all about what we get up to, how we coach and help property investors all around Australia and New Zealand. So sweet mate. So again, yeah, how many properties do you need? It's not as many as you think. And for me, you gotta be smart about that. There are a few properties out there that are interesting when it comes to high cashflow and listen, the right one, the right high cash flow property, it'll be fine, but they do carry a bit more risks. So you really got to analyze what that means, you know, now and into the future. And now I'm going, hopefully everyone's well, great to see everyone on this morning and thanks for all your comments. I'll get one of the team to hit you with a link and you can go download the free calculator and hit us up with any questions. If you've got, if you wanna know a little bit more. Alright, gang, take care. Hopefully everyone's well, stay safe and alright until tomorrow, by then chat then. Bye bye.