Who is the typical property investor?
Answering some frequently asked questions into who the ‘typical’ residential property is, the Australian Tax Office’s report for the financial year 2017 has revealed a few statistics which some might find surprising.
How much does the average property investor earn?
Despite many people thinking you have to have a massively high income to own a property, the report say otherwise; well over half, 64 percent, of people who have an investment property earn under $80,000 per year. That means that carers, teachers, factory and hospitality workers, signwriters and many other lower income earners could all be owning a property.
In fact, just 7 % of property investors are earning more than $180,000 per year.
It might be time for you to do a few sums and speak to a financial advisor!
How many properties does an investor own?
While most property investors, (around 71 %) own one property, the ATO’s report also found 19 % own two, and just under 10 % own three or more properties.
How old are property investors?
It’s no surprise that the majority of property investors are aged 50 or over – just under half (49 %) are in this aged group. However, a quarter, 25 % of property investors are aged between 40 – 49.
What are investors claiming?
According to the report, more people claimed tax back on their properties in FY 2017, with over 3 million property investors claimed deductions relating to their rental property. This was an increase of 3.38 % from the previous financial year.
The figures showing the interest on loans as being the highest expense claimed for on loss-making rental properties in 2017, coming in at a hefty $18,003,089,767. After that, it capital works deduction ($2,686,282,577), plant depreciation ($2,267,756,183), council rates ($1,975,758,715) and repairs and maintenance ($1,861,206,782).
Body corporate fees, insurance and water charges all were high up the list for 2017 claims. But you may be interested to know, other expenses included the $41.73 million landlords spent on stationery, telephone and postage costs. Plus $269.43 million of travel expenses and another $145.18 million for gardening and lawn mowing costs.
As an aside, we thought we’d flag up at this point, it’s worth speaking to an accountant or a specialist in property investment as to what you can and can’t claim tax for. In March this year, income, tax commissioner Chris Jordan highlighted some other ATO research*, which found almost nine in 10 property investors who claim tax deductions on their rentals were making errors.
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