31 March 2016 When your home becomes an investment When your home just doesn't tick the boxes anymore, you know it’s time to move on. The next question is – do you sell or hang on to it as an investment? Keeping an investment property may offer important tax advantages. The main one is that you can generally claim the loan interest as a tax deduction. Likewise you can generally claim things like strata levies, council rates and depreciation. The flipside is that you have to declare the rental income in your tax return. And since it’s no longer your family home, capital gains tax is now payable on any future price growth. It’s not just about tax of course, tax isn’t the only consideration. Are you comfortable taking on a higher level of debt? Or should you be using the equity from your old home to take a smaller loan on the new home? Another important question is whether your existing home is the best investment property available. You may find that you’re better off selling your old home and considering buying a new investment property. That way you may be able to take out a smaller non-deductible loan on your new home, while taking out a larger tax-deductible loan on the investment property. To find out more about how RAMS can help with your home loan needs, get in touch with your local RAMS Home Loan Specialist. You should also seek advice from a financial planner or tax specialist. Note: While the information provided here is intended as a guide only, your individual circumstances should naturally be taken into consideration. This is why we also recommend you obtain independent professional advice relevant to your financial circumstances.