Why Perth for property investment?
Perth's property investment market offers compelling opportunities — gross yields of 5–7%, vacancy rates below 1% in many suburbs, and strong capital growth continuing through 2024–2026. Perth is attracting investors from across Australia.
Interest-only vs principal and interest
For investment loans, interest-only repayments are often preferred during the growth phase. Investment loan interest is tax-deductible under negative gearing. A $500,000 investment loan at 6% generates $30,000 in deductible interest — at a 37% marginal tax rate, that is an $11,100 annual tax saving.
Avoid cross-collateralisation
Linking your investment property loan to your family home as security gives the lender significant leverage over your decisions. TAG Finance strongly advises keeping investment loans completely separate from your family home.
SMSF property investment
Your self-managed superannuation fund can purchase investment property through a limited recourse borrowing arrangement (LRBA). Within the fund, rental income is taxed at 15% in accumulation phase and 0% in pension phase.