There are some common items… - Posted by soapymac
Posted by soapymac on July 20, 2000 at 07:41:23:
between OZ, Canada, and the US. There are also some unique differences.
What is common is our basis in real estate law. All three countries are based upon English Common Law because all three nations have Great Briain as a source for their present body of law.
So I’m going to share with you what I believe is common to all three nations, and in the same breath tell you to get a solicitor who specializes in real estate law in OZ as part of your team.
That said, I would ask FIRST, why are you considering just the benefits of tax depreciation only? Is this for a rental property, OR, as I perceive your post, you are trying to creatively apply law of one type of investment to another?
If you have read the series of books by Robert Kiyosaki, I would recall to your remembrance that he does NOT consider where you live as an ASSET. (That’s Kiyosaki’s definition, folks…not mine.)
If, however, you are considering tax depreciation as part of the investment cashflow overall, my question is, “WHY?” Is there something different in the body of RE law in OZ that MAKES depreciation a relevent item…OR should any depreciation be considered as “gravy” to the transaction?
I’ve noticed in other posts on the board from OZ that the concept of negative gearing (negative cashflow is the US term) is important. Again, I ask, “WHY?” To the best of my knowledge, profit is made going in to a transaction: putting that profit in your pocket should be done at the closing table…not when you sell and get out. Further, positive cash flow (positive gearing) should be the goal while you OWN the property. That is one statement, in all the posts I’ve seen from OZ, that is particularly noticeable BY ITS ABSENCE.
Forgive me for rambling, here. My son and daughter-in-law live outside Toowoomba and my son knows enough about RE to ask some intelligent questions of his father. The idea of making a profit going in to a deal is one that he knows, and he, too, is scratching his head to answer the same questions that I am posing to you here.
I’ve said all that…to ask this: what is there in RE law in OZ that makes negative gearing and depreciation SO important? I believe if you answer those questions, you may discover a way to answer your own.