If you are looking to invest in real estate in Adelaide, there are a number of tax breaks available – especially if you gear your property negatively. While this approach means rental yields will be lower, it can be good for capital gains in the long term. And by engaging a property manager, the day to day details of the property will be taken care of.
However, while this financial gearing can set you up nicely in the long term, there can be a number of hurdles when you first move to buy – namely, stamp duty.
While there are exemptions to stamp duty for first home buyers, the SA Division of the Property Council of Australia (PCA) has called for more work to break down barriers like this tax that stand between many homeowners and their next investment.
Daniel Gannon, SA executive director for the PCA, said in a 10 November press release that with the property industry contributing so much to the SA economy, there should be appropriate tax reform.
"The property and construction industry boasts 11.5 per cent of South Australia's workforce – the largest private sector employer in the state," Mr Gannon stated. He also added that this sector contributes more than any other to gross state product comprising 10 per cent of this figure.
Additionally, Mr Gannon noted that the property and construction industry in SA pays 40 per cent of the total state taxation revenue.
He hopes for this industry to get back on the journey to prosperity and says tax reform, particularly on stamp duty and other fees, must come into play.
This echoes the Housing Industry Association chief economist Harley Dale, who said last week that policy reform would lead to more real estate construction and financing.
Any changes along these lines could make it much easier to buy rentals in Adelaide.