Ripper Wealth

Foundations

Before you invest, get your house in order. Set goals, track cash flow, and build emergency reserves.

What To Own

Understanding asset classes and their roles in a balanced portfolio.

Why It Works

Historical context, wealth cycles, and the economic principles that drive markets.

AI-Powered Education

Cycle-aware tools backed by institutional-grade research

How To Execute

Profile-specific strategies. Content varies based on your persona (PAYG, Business Owner, Property/Crypto/Stock Investor, etc.).

When To Adjust

Timing and signals. Know when to buy, sell, or hold based on market cycles.

More

Learn about us, get help, share feedback.

TAX ESSENTIALS FOR PROPERTY • STEP 3 OF 4

Try It: Your Property Tax Calculators

Ninety percent of all millionaires become so through owning real estate.

— Andrew Carnegie

Use our interactive calculators to model your property's cash flow and calculate capital gains tax when you sell.

Your Learning Journey

GET READY

SEE IT

TRY IT

CHECK IT

This Step Takes: 20 minutes

Use two calculators to model your property's annual cash flow and calculate CGT when you sell.

What You'll Do

Model cash flow and calculate CGT with 50% discount.

Property Cash Flow Calculator

Model your rental property's income, expenses, and see how negative gearing reduces your tax.

Negative Gearing Visualizer

See how rental income, expenses, and tax deductions affect your cash flow.

In Simple Terms:

Negative gearing means your property costs you more than it earns. The good news? You can deduct that loss from your other income (like your salary), reducing your tax. The goal is the property value grows faster than your losses.

Property Details

Rental Income

Annual rent: $28,600

Gross Yield:4.77%
Net Yield:2.60%

Annual Cash Flow

Income
Rental Income:$28,600
Total Income:$28,600
Expenses
Interest:$31,200
Council Rates:$2,000
Water Rates:$1,200
Insurance:$1,500
Management (8%):$2,288
Maintenance (1%):$6,000
Total Expenses:$44,188

Negatively Geared

-$15,588 / year

How Tax Deduction Works:
Property loss:-$15,588
Tax saving (37% bracket):+$5,768
Net cost to you:-$9,820/year

This property costs you $9,820/year after tax. The strategy works if the property value grows faster than your losses.

Simplified calculation for educational purposes. Actual outcomes depend on your tax bracket, property specifics, and changing interest rates. Consult a property tax specialist.

Why Negative Gearing Works

Most Australian investment properties lose money on paper (rent doesn't cover all expenses). That's okay! The loss reduces your taxable income, saving you thousands in tax each year. The goal is for property value to grow faster than your accumulated losses over 7-10+ years.

Capital Gains Tax Calculator

Calculate CGT when you sell and see how the 50% discount saves you thousands.

Property CGT Calculator

Calculate capital gains tax on your investment property sale.

In Simple Terms:

When you sell an investment property for more than you paid, you owe tax on the profit. The good news? Hold it for 12+ months and you get a 50% discount on the taxable gain. This can save you tens of thousands in tax!

Purchase Details

Kitchen, bathroom renos, extensions (not repairs)

Must be 12+ months for 50% discount

Sale Details

Agent fees (~2-3%), legal fees, marketing

Your marginal tax rate (includes 2% Medicare levy)

CGT Calculation Breakdown

Sale price:$800,000
Less: Purchase price-$600,000
Less: Improvements-$20,000
Less: Selling costs-$25,000
Capital Gain:$155,000
50% CGT Discount:
-$77,500
Taxable Capital Gain:$77,500
Tax owed (37% bracket):-$28,675

Net Profit After Tax

$126,325

The 50% Discount Impact:
Tax WITH 50% discount:$28,675
Tax WITHOUT discount (if sold early):$57,350
You saved by holding 12+ months:$28,675

🎉 Great! You held for 12+ months and got the 50% CGT discount.

Simplified calculation for educational purposes. Actual CGT depends on your full income, other capital gains/losses, and specific circumstances. Consult a tax professional for accurate advice.

The 12-Month Rule

Selling before 12 months means NO 50% CGT discount. On a $200k profit at 37% tax rate, that's the difference between $37k tax (with discount) and $74k tax (without). Always aim to hold investment property for at least 12 months!

Key Takeaways

Negative Gearing Math

Property loss of $10k/year at 37% tax rate saves you $3,700 in tax. Real cost: only $6,300/year while the property (hopefully) grows in value.

The 50% Discount Is Huge

On a $300k property profit, the 50% CGT discount saves you $55k+ in tax (at 37% bracket). Worth waiting for!

Don't Forget Cost Base

Add improvements (kitchen renos, extensions) and selling costs to your cost base. This reduces your capital gain and saves you tax. Keep all receipts!

Tax-101 for Property - Try It: Complete

  • Negative gearing works if property value grows faster than accumulated losses over 7-10+ years
  • The 50% CGT discount (12+ month hold) can save you $20-50k+ in tax on a typical property sale
  • Your cost base includes purchase price + improvements + selling costs—track everything!

Homework

Reflect

If you own investment property, have you calculated your actual after-tax cash flow? Are you tracking all expenses for CGT cost base?

Action

Create a property expense spreadsheet today. Columns: Date, Category (interest, rates, insurance, repairs, etc.), Amount, Receipt. Update monthly. Come sale time, you'll have everything ready.

What's Next?

5 minutes