Property Investors Feel The Pain With Interest Rate Rises

With inflation still rising, currently at 7.3% in the quarter, and the RBA’s current cash rate of 2.85% announced on November 2, 2022, it is a critical time for investors. In just a short space of time, we have seen the cash rate increase from just 0.1% in April 2022 to a further 2.75%. In monetary terms, this is an extra $13,750 in annual interest payments made to lenders on a typical $500k loan! For every increase of 1%, that is another $5,000 a year in payments!

Koste CEO commented: ‘As a quantity surveyor who works with thousands of residential and commercial clients throughout Australia, I get asked on a daily basis where house prices will go. Well, I am no economist; however, as an investor myself, working with industry professionals daily, we are hearing of the strain these extra interest payments have on cash flow.”

Banks have already started to tighten lending criteria, and some investors will start to default, resulting in repossessions of property! Where will house prices go? It will depend on how aggressively the RBA wants to control inflation and get back to the target levels of just 2–3%; at the moment, this will be a huge task. During these difficult times, the only consolation is that any interest payment increases will be offset against your taxable salary, negative gearing will increase, and tax going to the ATO will reduce.

It is Koste’s commitment to our clients and partners to work hard for investors. Maximum deductions will be found and quantified, utilising the current tax legislation and guidelines. I will personally provide an ironclad guarantee that if we cannot find $80,000 in total Tax Depreciation deductions, The Report Will Be Free!

With fewer than 10% of Tax Depreciation providers who are full members of the AIQS and RICS, property investors need to be careful with tax depreciation recommendations! Give us a call today and let the professional team at Koste to assist you with your next tax depreciation report.