Property Investment: Early tax refunds

Get your tax refund early and boost your cash flow. Speak with an expert

Using a negative gearing strategy will increase the size of your tax refund.

But you don’t have to wait until July to get ask for your money back. You can get the tax benefit early by reducing the tax that comes out of your pay cheque.

Your employer is not allowed to reduce the rate of tax on your pay without permission from the ATO. You can only reduce your withholding tax by completing a PAYG Withholding Variation.

The form can be completed and submitted online. In a matter of days the ATO will inform your employer’s payroll department of the new, reduced rate of tax to take out of your pay.

Having the immediate additional cash flow can lessen the burden of your rental expenses such as loan repayments. Cash flow is critical, especially for highly geared investors.

Kate is a property investor who has borrowed 95% of the value of her investment property. She is negatively geared and expects a refund of $11,000 based on her interest expenses, depreciation and other deductions.

If Kate lodges a PAYG withholding variation, the ATO can authorise Kate’s employer to deduct approximately $400 less tax from each fortnightly pay. The additional $400 in take home pay allows Kate to more comfortably service her loan.

The PAYG withholding form can be complex, especially when lodging your first application. You need to complete the details of all your properties on your first year’s application. In subsequent years you only need to add any new properties you buy, so the process is not as involved.

If you think that improved cash flow would benefit you, and would like assistance lodging a PAYG Withholding Variation please contact our office for an appointment.

If you would like more information on the form go to ato.gov.au and search “00096541”.

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