WHERE TO INVEST? 9 STRATEGIES

With the government's shock introduction of laws slashing interest deductions on existing rental properties, where can you as an investor put your money? What will get you the best return while still maximizing tax deductions? We present 9 strategies: 

1. New builds.  New build homes will not be subject to the interest deduction limitations, and will only be subject to a 5-year Brightline period. 
   
2. Commercial property, as it is not subject to these new rules.
3. Mixed commercial ie commercial with a flat, may be worth looking into as well; you would likely not be able to claim interest on the accommodation portion but could on the commercial portion, so would need to "do the numbers" to see if it adds up.
4. Short-stay accommodation, because it is not subject to these interest deduction limitations if a Mixed Use Asset - see this link for more info. (Talk to StayHub about how it could work; contact us to discuss your property/ies)
5. Boardinghouse accommodation e.g. near large hospitals and the universities, there is a demand for this. These can consist of 4 mostly-self contained units, with shared major cooking and laundry facilities.
6. Relocatable homes. If you relocate a home to a section, it is considered a "new build" (see point 1).
7. Add a dwelling to your home. If you add a dwelling and a new Council Code of Compliance (CCC) is required, it is considered a "new build" (see point 1).
8. Split 1 house into 2. If you add a dwelling and a new Council Code of Compliance (CCC) is required, it is considered a "new build" (see point 1).
9. Buy a rental property overseas. Overseas properties are not impacted by the changes, so you can still claim interest on the borrowings.