Owning a property may not only offer you benefits but it also comes with some responsibilities. One of which is, having to pay property tax. For some people, paying property tax is burdensome, that is why people always try to find other ways to reduce their property tax, especially people who already become a member in property investment, mostly this investment makes them becoming a super rich club. If you are still working your way towards becoming a member of this super rich club that does not stop you from using some of their strategies and structures to keep the tax man away from your property. Here are some of the tips.
- Become a philanthropist
Dick Smith, Resident colorful entrepreneur, says there are only two options for super rich people in reducing property tax, either be forced pay more tax or give more to charity. So, the amount of tax you save will rely on how much you spend your money to charity.
It will be better for having private company, since Australia’s corporate tax rate is currently 30% as opposed to 45% for the top personal marginal tax free. If you are earning more than $180,000 per year from your business, have an incorporate will be a good option. However, you will need some expertise to help you create the best company structure for your business and estimation of additional costs that related with running an incorporated entity.
- Shelter income in a private trust
Having a family as your discretionary trusts, this give the trustee control over how income is distributed. The trustee can also simply decide not to distribute income to beneficiaries to avoid income tax in certain years. In fact, a family or discretionary trust still used to great success by many people. However, we suggest you to take a deep advice from expertise before starting a family of discretionary trust.
- Stack Up Your Super
Put your income more in super will have two benefits, first reduce your taxable income, second it boosts your retirement savings.
- Send Your Money offshore
These days, offshore bank accounts are becoming easier to open and run, so you can do what extra-wealthy persons do for their tax havens. The thing that should be considered is locating your cash in country which has much closer to home in tax havens laws and at the same time making sure it is all above board. For example, you could consider Hong Kong or Singapore.