What is capital gains tax? It is definitely one of the most misunderstood taxes, with many clients often coming up with their own strange and elaborate calculations.

Capital gains tax (or otherwise know as CGT), is the tax that is charged on the gain that you make on selling or disposing of any asset (such as property or shares), of which the date of acquisition of the asset is after the 20th September 1985.

 For property investors with negative geared properties, tax time is like Christmas time. They are usually the first clients in the door, after the 1 July, as they know that there will be a pot of cash that will be lying there, waiting for them to collect.

We have been heavily promoting end of year tax tips for business owners, and for those that are self employed. But what about property investors? This is sometimes overlooked by accountants, as property is usually an investment vehicle for long term growth. We however, see property investing as a business. And when you are running are business (in property investing), then there are definitely tax tips for you!

So you have purchased your first investment property. You found yourself the perfect property, and then the perfect mortgage broker. What happens next? Do you sit back and relax, and enjoy the ride? Or do you get in there, spanner and tools, and change the oil yourself?

In which structure should I buy my property?
Although we would love to say that this is a common question asked by clients to their accountants, it is usually a question that is never asked. Only the experienced and astute property investor take the time and understands the value in obtaining proper advice. This is why we have included this guide, in the pre-purchase section, so that your property portfolio is set up correctly, from the very beginning.

In part 1 of our 8 part series, we mentioned the need for you to establish your budget. Establishing your budget means finding a fantastic, top of the line, mortgage broker who will not only assist you in finding the right product, but will also help you determine what you can and can't afford. If we were to list the reasons why an exceptional broker should be on your speed dial, the list would go on and on – and a book could be written about it (although, one might ask, who would actually read it!).

In this current economy where interest rates are at an all time low, investing in property is no doubt the hot topic, and may be for quite some time.

Property, when purchased for the right reasons and in the right structure, is still regarded as one of the safest long-term investments.

While some investors may want to buy a property and rent it out straight away, others may choose to live in the home while they renovate it. Property investment can be a great way to create wealth, but there are some golden rules to consider before taking the plunge into property investment.

Property is the most trusted asset class for Australians, yet only around 3.5% of all SMSF investment is in residential property according to the latest ABS report (www.ato.gov.au/Super/Self-managed-super-funds). Property investment can produce a range of tax benefits, for e.g. your tax can be significantly reduced or eliminated for rental income and capital gains, and the rental return can be used for loan repayments.