Convert Property Purchase Costs Into Tax Free Income

Hello there. I’m Rick Leighton from Ethical IQ Advisory.

Today, let’s dive into how you can turn the costs of buying property into tax-free income.

More and more savvy property investors are turning to professional advisers to help them find and select the best properties.

And that makes sense.

When you’re investing a substantial amount of money, you want to make sure you’re making the right decision. And realistically, most investors don’t have the time or access to all the data needed to identify the next major growth opportunities in the market.

Getting expert advice can make a huge difference to the long-term performance of your property assets.

But there’s a catch.

The cost of that professional advice is usually not tax deductible.

Instead, those fees are typically added to the capital base of the property, which means you only receive the tax benefit when the property is eventually sold.

The ATO generally takes this view because they don’t see a strong enough link between the advisory expense and the income-producing activity of the property.

This can be frustrating, because quality property advice can easily cost $15,000 to $20,000 upfront.

It would obviously be far better if you could claim those costs as an immediate tax deduction.

And that’s exactly what this game-changing strategy is designed to achieve.

In 2024, Ethical IQ Advisory prepared a detailed submission to the ATO seeking a private ruling on this issue.

Our aim was to clarify which parts of property purchase advisory fees could legitimately be claimed as deductions.

The ruling itself was fairly complex — and, let’s be honest, quite dry reading — but it provided clear guidance about what can be claimed and when.

This led to the development of Game-Changing Tax Strategy Number 6.

Using this approach, investors can structure their property purchases so that their advisory fees become tax deductible.

And when combined with Ethical IQ Advisory’s trust structures, those deductions can effectively become tax-free income.

So it’s really a double win.

As a result, our clients are typically able to claim around 94% of the advisory fees they pay as an immediate tax deduction.

To find out more, talk to us at Ethical IQ Advisory — Australia’s number one tax advisory firm for property investors.

You can book a complimentary strategy onboarding session by selecting Game-Changing Tax Strategy Number 6: How to Convert Property Purchase Costs into Tax-Free Income.