You don’t have to have a Swiss bank account to escape from having to part with large chunks of your hard-earned savings in the form of taxes. There are plenty of tax loopholes available to formulate strategies to lower your tax outputs. And investing in real estate is one of the many lucrative ways of reducing your taxes.
Unknown to you, owning your own home provides you with tax relief; even the mortgage interest on your loan provides you with clear tax deductions. And yet better news is that when you sell your house, any profits you make are not liable to being taxed either. So flipping homes could be a great way of building up your savings- tax free! The only lien is that you have to stay in that house for a year or two before selling. Another tax loophole is the depreciating value of your house- a gleeful source of tax income!
Investing wisely in real estate can provide you with greater leverage and cash flow. Aside from being able to avail of depreciation strategies, you also get to pay only a fraction of the total cost of your investment, while taking a tax deduction for the full cost of your purchased property. Not bad at all!
Believe it or not, your real estate investment is a ‘business’ too that can be used as an advantage for tax benefits. One lax tax loophole is by using the ‘business’ as a source of tax freedom for the use of your ‘official’ car, phone, equipment or home office. You can even make repairs to your home and deduct it from taxes incurred on your ‘home office’ used for your business!
Another creative way to reduce your tax liability is by rolling the proceeds of your first property sale into the purchase of your second property…and then into a third property or more; so essentially your first tax liability turns into a tax-free loan. Basically, you will be swapping the taxes owned on your first property into a second property, and a third or fourth even. This is how the wealthy save on their taxes while becoming wealthier through their investments in real estate; ownership of rental properties are great investments too that allow the wealthy to earn while escaping from heavy tax liabilities.
So the question is how come the wealthiest people in the country get to pay the least percentage of taxes? It’s because their income doesn’t come from jobs, but from investments. Looks like it’s time for you to take your share of the cake and start earning from investments in real estate too!
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