Investopoly

I wrote a blog in May warning investors to prepare for lots of bad news, uncertainty and market volatility. My thesis was that rising inflation, supply chain issues and rising rates would cause economic pain. Unfortunately, my prediction was correct, and we should expect the volatility to continue for many more months to come. It is possible that all you may see are risks and problems at the moment. But in 5 years from now, it is likely you’ll look back and see lots of (missed) opportunities because the rear vision mirror is always clearer than the windscreen. I’d like to share four rules which can help guide you to make great investment decisions over the course of the next year, and the rest of your life. Missing the best days of the market is a good lesson and a perfect metaphorThere are lots of charts that demonstrate that if you miss the 10 best days in the share market over a long period of time (say 10 years), it will have a dramatic negative impact on your overall investment returns i.e., you will earn half the returns or less. This chart is a good example. The lesson is that no one can pick the best days and the worst days. Therefore, if you sell your investments because you are concerned about volatility, you will inevitably miss the best days (best returns) and your overall performance will suffer. Another way to look at it is, that the best returns come in the years following a stock market decline. The chart below, which covers almost one century of data, illustrates this very eloquently (produced by Dimensional).   CHARTThis concept applies to all markets and asset classes including residential property. Understand that volatility is normalThe event or issue that causes volatility (i.e., market uncertainty) is always unique and unpredictable. An event must be unpredictable to cause the market to fall dramatically because predictable events/issues are already systematically reflected in share prices. Volatility is normal and it should be expected. Volatility is a very important part of price discovery which ensures the markDo you have a question? Email: questions@investopoly.com.au or for a faster response, post a comment on the episode's video over on YouTube: https://www.youtube.com/@investopolypodcast/podcasts If you're interested in working with my team and me, discover how we can work together here: https://prosolution.com.au/prospective-client/If this episode resonated with you, please leave a rating on your favourite podcast platform. Subscribe to my weekly blog: https://www.prosolution.com.au/stay-connected/ Buy a one of Stuart's books for ONLY $20 including delivery. Use the discount code blog: https://prosolution.com.au/books/DOWNLOAD our 97-point financial health checklist here: https://prosolution.com.au/download-checklist/IMPORTANT: This podcast provides general information about finance, taxes, and credit. This means that the content does not consider your specific objectives, financial situation, or needs. It is crucial for you to assess whether the information is suitable for your circumstances before taking any actions based on it. If you find yourself uncertain about the relevance or your specific needs, it is advisable to seek advice from a licensed and trustworthy professional.

A Goldilocks investment strategy means that you are making the most of your financial opportunities without overdoing it and taking unnecessary risk. That is, your level of investing is exactly right (i.e., perfectly balanced).  Underinvesting means that you risk not having enough investment assets to enjoy a comfortable retirement.  Overinvesting means that you have taken unacceptable risks which may compromise your ability to achieve a comfortable retirement.  The goal is to achieve a perfect balance – invest enough to ensure you will meet your lifestyle goals – but not too much that you put your lifestyle goals at risk.  Overinvesting can do a lot of harm I recall working with a mortgage broking client (not financial planning) for several years prior to 2008. The client purchased 6 investment-grade properties over a relatively short period. After the sixth acquisition, I advised the client to not purchase anymore properties, as I felt taking on more debt would be too risky. The client ignored my advice and purchased two more investment properties – which I only found out about after the fact!  Unfortunately, the GFC hit Australian shores in 2008/2009 and the RBA cash rate climbed to 7.25% which put pressure on the client’s cash flow. Worse still, credit rules and policies were rightfully tightened which locked this client out of their ability to refinance. The client had no choice other than to sell all but two of their properties in the years following 2010 because they wanted to retire.  This client’s story is a perfect cautionary tale. Debt is a wonderful servant, but a terrible master. Borrowing to invest can be a very powerful and beneficial strategy but it must be used carefully. You must never borrow more than you can afford and should consider your ability to service repayments when interest rates rise. For example, what if you are forced to eventually repay principal and interest. Or due to borrowing capacity, you can’t refinance e.g., you are trapped at your current lender. You must consider these risks.   Underinvesting comes with great opportunity cost Arguably, underinvesting is just as bad as overinvesting. Underinvesting means that you risk not accumulating sufficient investment assets to achieve your lifestyle goals i.e., funding a comfortable retirement.  I wrote a blog earlier this year (here) setting out the three common reasons that tend to cause people to underinvest. It’s wDo you have a question? Email: questions@investopoly.com.au or for a faster response, post a comment on the episode's video over on YouTube: https://www.youtube.com/@investopolypodcast/podcasts If you're interested in working with my team and me, discover how we can work together here: https://prosolution.com.au/prospective-client/If this episode resonated with you, please leave a rating on your favourite podcast platform. Subscribe to my weekly blog: https://www.prosolution.com.au/stay-connected/ Buy a one of Stuart's books for ONLY $20 including delivery. Use the discount code blog: https://prosolution.com.au/books/DOWNLOAD our 97-point financial health checklist here: https://prosolution.com.au/download-checklist/IMPORTANT: This podcast provides general information about finance, taxes, and credit. This means that the content does not consider your specific objectives, financial situation, or needs. It is crucial for you to assess whether the information is suitable for your circumstances before taking any actions based on it. If you find yourself uncertain about the relevance or your specific needs, it is advisable to seek advice from a licensed and trustworthy professional.

 Commentators often refer to the price of property in Australia relative to household incomes. They highlight that property prices have risen two to three times faster than household incomes. They conclude that property growth cannot exceed income growth perpetually.  Obviously, this is unsustainable at a macro level. I’ve written about the factors that contributed to property price growth over the past few decades here. But many of these factors won’t repeat themselves over future decades. However, I argue that this commentary isn’t relevant to investors if they invest in investment-grade property. My thesis is that if you invest in locations that attract the wealthiest 20% of Australians, it is likely you will enjoy an above average capital growth rate. Wealth inequality is a terrible phenomenonWealth inequality means that the rich get richer, and the poor get poorer in a real and relative sense. It makes escaping poverty more difficult. It robs people of equal opportunities. It’s a terrible phenomenon. The chart below demonstrates how significant wealth inequality is in Australia. The wealthiest 20% of Australian’s own more than 73% of the total personal wealth in Australia – the 80/20 rule at play.  CHARTIt would be lovely to think that Australia will create greater wealth equality in the future, but unfortunately, I don’t think it’s likely. In fact, wealth inequality is likely to get worse, not better. Unfortunately, Covid exacerbated it as higher income earners were typically able to work from home. Rising interest rates and inflation are much less of a concern to wealthier and/or higher income earners.  All these things make wealth inequality worse. Therefore, when making investment decisions, it’s prudent and advisable to assume that wealth inequality will continue. If it does, its likely property price growth rates in blue-chip locations which attract the wealthiest Australians, will materially exceed outer suburbs.  Is there a relationship between average suburb owners’ income and capital growth?The theory is that if you invest in suburbs where the occupants earn above average incomes (based on census data or similar), then those suburbs will experience higher rates of growth because occupants can afford to pay more. Whilst this sounds logical, in reality, income datDo you have a question? Email: questions@investopoly.com.au or for a faster response, post a comment on the episode's video over on YouTube: https://www.youtube.com/@investopolypodcast/podcasts If you're interested in working with my team and me, discover how we can work together here: https://prosolution.com.au/prospective-client/If this episode resonated with you, please leave a rating on your favourite podcast platform. Subscribe to my weekly blog: https://www.prosolution.com.au/stay-connected/ Buy a one of Stuart's books for ONLY $20 including delivery. Use the discount code blog: https://prosolution.com.au/books/DOWNLOAD our 97-point financial health checklist here: https://prosolution.com.au/download-checklist/IMPORTANT: This podcast provides general information about finance, taxes, and credit. This means that the content does not consider your specific objectives, financial situation, or needs. It is crucial for you to assess whether the information is suitable for your circumstances before taking any actions based on it. If you find yourself uncertain about the relevance or your specific needs, it is advisable to seek advice from a licensed and trustworthy professional.

I believe that most people have a very similar tolerance for investment risk.  Most people are comfortable achieving a long-term annual return of 7% to 10% if the risk of losing money is very low. In short, I think most people have a low appetite for risk – they prefer to take as little risk as possible and invest in a “sure thing” if the return will be enough for them to meet their goals. What is a risk profileRisk is the probability of not achieving your targeted investment returns. This might happen in two ways. Firstly, the investment might end up being a dud with little prospects of ever delivering the returns you desire i.e., an investment mistake. Secondly, you might not achieve your returns temporarily, due to intermittent volatility. For example, if you invested in the Australian share market in May 2021, your return just over one year later is zero, as over that time, the market risen, fallen, and subsequently recovered back to May 2021 levels (ignoring dividend income). But this volatility is almost certainly temporary. We know that over multiyear periods (e.g., a decade or longer), the market has always trended higher. Most people are only concerned by the first risk because they know volatility is normal and are happy to endure it if they will be rewarded adequately in the long run. That said, some people, albeit a minority, have a low tolerance for intermittent volatility. How do you measure your risk profile The traditional way to measure risk tolerance is by asking a series of hypothetical questions to measure your comfort/discomfort with experiencing volatility and investment losses. This questionnaire is a good example, which we use in our practice (it’s based on this paper). However, I am skeptical that these questionnaires provide reliable information. It’s one thing to predict how you’d feel if your investments fell by 30% of value, but until your experience it, you don’t know for sure. We know that humans have a strong cognitive bias for loss aversion – the pain of losing is psychologically twice as powerful as the pleasure of gaining. 95% of people have the same profile I describe most people’s risk tolerance below (including my own): I work hard for my money, so I don’t want to take high risks and risk losing it. I’d be hapDo you have a question? Email: questions@investopoly.com.au or for a faster response, post a comment on the episode's video over on YouTube: https://www.youtube.com/@investopolypodcast/podcasts If you're interested in working with my team and me, discover how we can work together here: https://prosolution.com.au/prospective-client/If this episode resonated with you, please leave a rating on your favourite podcast platform. Subscribe to my weekly blog: https://www.prosolution.com.au/stay-connected/ Buy a one of Stuart's books for ONLY $20 including delivery. Use the discount code blog: https://prosolution.com.au/books/DOWNLOAD our 97-point financial health checklist here: https://prosolution.com.au/download-checklist/IMPORTANT: This podcast provides general information about finance, taxes, and credit. This means that the content does not consider your specific objectives, financial situation, or needs. It is crucial for you to assess whether the information is suitable for your circumstances before taking any actions based on it. If you find yourself uncertain about the relevance or your specific needs, it is advisable to seek advice from a licensed and trustworthy professional.

 Most people would say that finding a good financial advisor has always been a difficult task. Ten years ago, most financial planners received commissions for remuneration, so clients had to navigate endless conflicts of interest. Thankfully, investment commissions no longer exist. The challenge is now finding an advisor with well-rounded experience. Commissions are banned – it's more about experience and scopeFinancial advisors use to receive commissions from managed fund providers which created a conflict of interest, as data showed that they’d only recommend the funds that paid commissions, and the higher fees (resulting from the cost of paying this commissions) greatly diminished net investment returns. In essence, commissions incentivised planners to recommend poor quality investments (managed funds). Commissions on new investments were banned in 2014 and on existing (grandfathered) investments in 2018. Financial advisors now cannot accept conflicted remuneration arrangements by law e.g., commissions. Obviously, this was a massive step forward because the existence of commissions was almost wholly responsible for all the poor advice outcomes that people experienced. In a commission-based (or any conflict of interest) world, most advisors core competency was salesmanship, not delivering quality financial advice. But most unsuspecting customers didn’t realise this – often planners were wolves in sheep’s clothing. This has changed now. Financial advisors no longer need to sell, just advise. Therefore, in my view, when choosing an advisor, you must consider (1) whether they have enough experience and (2) whether the scope of their advice maximises your opportunity i.e., knowledge. With respect to scope, I’m a staunch believer that holistic advice maximises value, as discussed here (where I shared 6 case client studies). High quality advice is multifaceted because it includes many considerations including tax, super, estate planning, insurance/risk and so on. The mass exodus of advisors will take years to repair There have been several changes in the financial planning industry which have resulted in a mass exodus of advisors. In 2018 there were about 28,000 financial advisors in Australia. Around 40% of these advisors have already left the industry and it is predicted that advisor numbers will fall to circa 13,000 by the end of next year. Of course, there were many shoddy financial advisors that really needed to leaDo you have a question? Email: questions@investopoly.com.au or for a faster response, post a comment on the episode's video over on YouTube: https://www.youtube.com/@investopolypodcast/podcasts If you're interested in working with my team and me, discover how we can work together here: https://prosolution.com.au/prospective-client/If this episode resonated with you, please leave a rating on your favourite podcast platform. Subscribe to my weekly blog: https://www.prosolution.com.au/stay-connected/ Buy a one of Stuart's books for ONLY $20 including delivery. Use the discount code blog: https://prosolution.com.au/books/DOWNLOAD our 97-point financial health checklist here: https://prosolution.com.au/download-checklist/IMPORTANT: This podcast provides general information about finance, taxes, and credit. This means that the content does not consider your specific objectives, financial situation, or needs. It is crucial for you to assess whether the information is suitable for your circumstances before taking any actions based on it. If you find yourself uncertain about the relevance or your specific needs, it is advisable to seek advice from a licensed and trustworthy professional.

If Australia slips into a recession, it will mostly likely be the RBA’s fault. They have completely botched the management of interest rates to the detriment of borrowers, the economy, and the bond market. Here’s why…  In its defence Firstly, in the RBA’s defence, is has been navigating uncharted territory over the past 2.5 years. There was a lot of uncertainty about what damage a once-in-a-lifetime global pandemic could cause. At the beginning, no one knew how long lockdowns would last for or whether pharmaceutical companies would ever be able to formulate a vaccine. There was a lot of uncertainty and no pandemic experience to guide decision making. Secondly, the RBA did react very quickly with some good initiatives as soon as Covid hit in March 2020, namely: §  It slashed the cash rate by 0.75% in March 2020 and then by 0.15% in November 2020, so that the cash rate was ostensibly zero (target rate was 0.10%). §  It launched its Term Funding Facility where it ended up lending $188 billion to the banks at a fixed rate of only 0.10% for 3 years. The banks used this facility to offer customers very cheap mortgage fixed rates – often below 2% p.a. – which gave borrowers confidence and improved household cash flow during what was a tumultuous period. The RBA closed this facility in June 2021. §  It also participated in what’s called yield curve control. This means it actively participated in the bond market to maintain the 3-year bond rate at 0.10% (the cash rate), often through buying government bonds i.e., QE.  All three of these measures were appropriate, timely and necessary. What it did wrong In my view, the RBA made three critical mistakes. Firstly, the RBA’s Governor, Lowe adopted the unusual practice of providing forward interest rate guidance. Up until last year, Lowe relentlessly assured Australians that the RBA would not raise rates until 2024. Yes, he did say that his prediction was conditional upon the RBA’s economic expectations, which did not include higher inflation at the time. But my point is that historically, the RBA says very little and lets the free market decide what the future holds. Secondly, it began raising the cash rate too late and it’s probably hiking it too quickly. I think it was obvious by the first half of 2021 that the Australian economy was very reDo you have a question? Email: questions@investopoly.com.au or for a faster response, post a comment on the episode's video over on YouTube: https://www.youtube.com/@investopolypodcast/podcasts If you're interested in working with my team and me, discover how we can work together here: https://prosolution.com.au/prospective-client/If this episode resonated with you, please leave a rating on your favourite podcast platform. Subscribe to my weekly blog: https://www.prosolution.com.au/stay-connected/ Buy a one of Stuart's books for ONLY $20 including delivery. Use the discount code blog: https://prosolution.com.au/books/DOWNLOAD our 97-point financial health checklist here: https://prosolution.com.au/download-checklist/IMPORTANT: This podcast provides general information about finance, taxes, and credit. This means that the content does not consider your specific objectives, financial situation, or needs. It is crucial for you to assess whether the information is suitable for your circumstances before taking any actions based on it. If you find yourself uncertain about the relevance or your specific needs, it is advisable to seek advice from a licensed and trustworthy professional.

Queensland announced changes to land tax in its state budget in February 2022. On 12 July 2022, it released more detail regarding how these changes will be implemented (see here).  Queensland land tax to rise substantially for interstate investors Essentially, when determining an investors land tax liability, the Queensland government will consider the value of landholdings in Australia (excluding principal residence), not just Queensland, and apportion the land tax liability accordingly.  This is best explained using an example Situation: Gary owns an investment property in Queensland with a land value of $800k and an investment property in Victoria with a land value of $1m. Total Australian landholdings are therefore $1.8 million, excluding his primary residence.  Current land tax: Gary is only charged land tax on his Queensland property only at a rate of 1% for the amount above $600k plus $500 (individual land tax rates can be found here). So, Gary’s land tax liability is $2,500 p.a.  Proposed from 30 June 2023: The Queensland government will calculate the land tax payable on $1.8 million and multiple this amount by 44% (being the portion of Queensland land versus total land owned Australia wide i.e., $800k/$1.8m). Consequently, Gary’s land tax liability will increase from $2,500 p.a. to $7,866 p.a.! Yes, a 3-fold increase!!!  There are some practical challenges If you own an investment property in Queensland and other states, you will have to declare the value of this land with the QRO within 30 days of receiving a land tax assessment or by 31 October 2023, whichever is earlier.  Whether Queensland is able to data match and audit these declarations, is unknown at this stage, but I suspect they will.  What impact will this change have? These changes don’t begin until 30 June 2023 and a lot can happen between now and then. I expect the Queensland government will receive a lot of resistance and lobbying.  However, assuming these changes are implemented as proposed, this will have a big impact on investors returns and cash flow. Investors will either need to pass on some of these higher holding costs onto tenants in the form of higher rents or they will divest of their property/s, which potentially means fewer properties available to let. Either way, it will almost certainly result in a rental crisiDo you have a question? Email: questions@investopoly.com.au or for a faster response, post a comment on the episode's video over on YouTube: https://www.youtube.com/@investopolypodcast/podcasts If you're interested in working with my team and me, discover how we can work together here: https://prosolution.com.au/prospective-client/If this episode resonated with you, please leave a rating on your favourite podcast platform. Subscribe to my weekly blog: https://www.prosolution.com.au/stay-connected/ Buy a one of Stuart's books for ONLY $20 including delivery. Use the discount code blog: https://prosolution.com.au/books/DOWNLOAD our 97-point financial health checklist here: https://prosolution.com.au/download-checklist/IMPORTANT: This podcast provides general information about finance, taxes, and credit. This means that the content does not consider your specific objectives, financial situation, or needs. It is crucial for you to assess whether the information is suitable for your circumstances before taking any actions based on it. If you find yourself uncertain about the relevance or your specific needs, it is advisable to seek advice from a licensed and trustworthy professional.

 Superannuation returns for the 2021/22 financial year were mostly negative. However, we shouldn’t forget that the previous 18-month period (i.e., mid-2020 to the end of calendar year 2021) was stellar, so we must keep a longer-term perspective. And the winner is… The table below sets out investment returns for the largest 8 industry funds based on a Balanced investment option (data provided by research house, Lonsec). The table is sorted by 1-year returns, highest to lowest for the financial year ended June 2022. Hostplus achieved the highest return – more about this below.  TABLEI have selected the relevant pre-mixed investment options that have between 60% and 76% of assets invested in growth assets e.g., shares. This is defined as a Balanced asset allocation. You will note however that some super funds don’t use the Balanced description – some call the option Growth or Core and so on. This highlights that it is important to not rely solely on an investment option’s name. Instead, it is important to examine the actual asset allocation of the option you are considering. Click here to view a similar comparison for a Growth investment option. Beware of unlisted assets valuations (or lack thereof) One of the concerns I have with some of these industry super funds is their lack of transparency, particularly with unlisted investments, as I discussed here last year. Transparency invites more accountability, which is a positive attribute, especially when investing is concerned. That is why I’m so attracted to rules-based and evidence-based investment methodologies – they are completely transparent. Transparency allows stakeholders to make better assessments as to an investment portfolios inherent risks and therefore likely future returns. Transparency reduces risk too because there’s nowhere to hide fees, risk or underperformance. I read with great interest this article in the AFR on 20 July 2022. The article suggested that two super funds held an interest in Australian technology company, Canva. TDo you have a question? Email: questions@investopoly.com.au or for a faster response, post a comment on the episode's video over on YouTube: https://www.youtube.com/@investopolypodcast/podcasts If you're interested in working with my team and me, discover how we can work together here: https://prosolution.com.au/prospective-client/If this episode resonated with you, please leave a rating on your favourite podcast platform. Subscribe to my weekly blog: https://www.prosolution.com.au/stay-connected/ Buy a one of Stuart's books for ONLY $20 including delivery. Use the discount code blog: https://prosolution.com.au/books/DOWNLOAD our 97-point financial health checklist here: https://prosolution.com.au/download-checklist/IMPORTANT: This podcast provides general information about finance, taxes, and credit. This means that the content does not consider your specific objectives, financial situation, or needs. It is crucial for you to assess whether the information is suitable for your circumstances before taking any actions based on it. If you find yourself uncertain about the relevance or your specific needs, it is advisable to seek advice from a licensed and trustworthy professional.

In mid-2021, I wrote this blog: “Don’t buy a property in this market…” because, at that time, many property buyers were over-paying for property just to get into the market. I call it the FOMO premium, for lack of a better term (more about this below). My thesis was that since it’s never wise to allow fear (e.g., FOMO) to influence financial decision making, it was better to not buy property in 2021 if it meant having to overpay.  We all know that the market has cooled somewhat this year. It is now my view that this is a much better market to buy in, if you can find the right asset, of course.  What drove the property boom in 2020 and 2021? The median house price in the eastern capital cities grew by between 12% and 16% p.a. compounding over the 3 years ended March 2021. I believe this growth was driven by two predominant factors: 1.     Long-horizon mean reversion; and 2.     FOMO premium.  The market was mostly making up for lost ground The chart below illustrates the historic compounding capital growth of the median house price in Melbourne, Sydney and Brisbane for the periods ending March 2022. The “long-term” figures reflect growth over the past 42 years i.e., 1980 to 2022.  <<CHART>> Whilst recent growth in property prices was well above the long-term average and therefore unsustainable, longer-term growth rates are still below the long-term averages with only two exceptions: 1.     Sydney’s growth rate over the past 10 years exceeds the long-term average by 1.60% p.a. However, growth over 15 years is in line with the long-term average. Therefore, it’s possible that Sydney prices have over-corrected over recent years and could enter into a flatter cycle for the few years; and 2.     Brisbane’s growth rate over the past 5 years has exceeded its long-term average. It is noteworthy however that growth over 10 and 15 years is still below average, so this market is probably still undervalued and could continue to grow strongly to revert to its mean.   This updated chart demonstrates that property markets tend to move in two distinct cycles: a flat cycle followed by a growth cycle. To a large extent, this is what happened in Melbourne and Sydney Do you have a question? Email: questions@investopoly.com.au or for a faster response, post a comment on the episode's video over on YouTube: https://www.youtube.com/@investopolypodcast/podcasts If you're interested in working with my team and me, discover how we can work together here: https://prosolution.com.au/prospective-client/If this episode resonated with you, please leave a rating on your favourite podcast platform. Subscribe to my weekly blog: https://www.prosolution.com.au/stay-connected/ Buy a one of Stuart's books for ONLY $20 including delivery. Use the discount code blog: https://prosolution.com.au/books/DOWNLOAD our 97-point financial health checklist here: https://prosolution.com.au/download-checklist/IMPORTANT: This podcast provides general information about finance, taxes, and credit. This means that the content does not consider your specific objectives, financial situation, or needs. It is crucial for you to assess whether the information is suitable for your circumstances before taking any actions based on it. If you find yourself uncertain about the relevance or your specific needs, it is advisable to seek advice from a licensed and trustworthy professional.

You must invest in residential property primarily to benefit from the power of compounding capital growth. Any tax benefits (negative gearing) are merely a positive consequence of this investment, not the reason for it. That said, of course it makes sense to maximise your taxation deductions wherever possible.  Make it easy for yourselfMaintaining accurate and complete taxation records is necessary to ensure all tax deductions are captured and treated correctly.  I encourage my clients to utilise their property managers services to make record keeping as simple as possible. This involves asking your property manager to pay for all property specific related expenses on your behalf. For example, if you receive a bill, forward it to your property manager and request they pay it. You may need to transfer some money into their trust account if there’s not enough rental income to pay for it, but that’s not a big deal. In fact, having your bills mailed/emailed directly to your property manager streamlines this approach.  The advantage of getting your property manager to pay for all expenses is that it will be recorded in the end-of-financial-year income and expense summary that they will provide you. At the end of the financial year, you just need to provide your accountant two pieces of information: (1) the rental summary and (2) a summary of interest and bank fees. This makes record keeping very simple.  Summary of most common tax deductions The ATO publishes taxation statistics for each tax year (the most recent data is from the 2018/19 tax year). This data covers the 2.8 million investment properties that are owned by 2.2 million taxpayers. The most common tax deductions were:   | Deduction expense | Proportion of total deductions  | Interest on loans  | 47% | Capital works deduction  | 8% | Council Rates | 7% | Property Agent fees/commission | 6% | Plant depreciation | 6% | Repairs and maintenance | 6% | Body Corporate Fees  | 5% | Water charges | 4% | Insurance | 3% | Land tax | 3% | Other inc. cleaning, garden, adverting, etc. | 5%Source: ATO Interest and bank fees Interest and mortgage related fees will likely be your biggest tax deduction so it’s critical that you ensure its complete and accurate. I wrote this blog in 2020 which lists ten rules to follow to ensure you maximise your interest deductions.  Most banDo you have a question? Email: questions@investopoly.com.au or for a faster response, post a comment on the episode's video over on YouTube: https://www.youtube.com/@investopolypodcast/podcasts If you're interested in working with my team and me, discover how we can work together here: https://prosolution.com.au/prospective-client/If this episode resonated with you, please leave a rating on your favourite podcast platform. Subscribe to my weekly blog: https://www.prosolution.com.au/stay-connected/ Buy a one of Stuart's books for ONLY $20 including delivery. Use the discount code blog: https://prosolution.com.au/books/DOWNLOAD our 97-point financial health checklist here: https://prosolution.com.au/download-checklist/IMPORTANT: This podcast provides general information about finance, taxes, and credit. This means that the content does not consider your specific objectives, financial situation, or needs. It is crucial for you to assess whether the information is suitable for your circumstances before taking any actions based on it. If you find yourself uncertain about the relevance or your specific needs, it is advisable to seek advice from a licensed and trustworthy professional.