Lowering the tax bill

[Account Closed]

Hello

Let me state upfront this may seem like a rather strange question.

I am looking to expand my portfolio but I currently don't a need for the rents income. If I use it exclusivly to pay the debt on the property will the rental income still be subject to tax?

I currently have a comfortable salary and have no need for the income. I would rather accelerate the payments of the debt so I can expand quicker and acquire more property

I don't want to begin to draw from the properties untill I can take enough to leave my job entirely

Any guidance or feedback would be greatly appreciated

V/r

The new guy

[Ashish Acharya]

Originally posted by @Account Closed:

Hello

Let me state upfront this may seem like a rather strange question.

I am looking to expand my portfolio but I currently don't a need for the rents income. If I use it exclusivly to pay the debt on the property will the rental income still be subject to tax?

I currently have a comfortable salary and have no need for the income. I would rather accelerate the payments of the debt so I can expand quicker and acquire more property

I don't want to begin to draw from the properties untill I can take enough to leave my job entirely

Any guidance or feedback would be greatly appreciated

V/r

The new guy

 Paying down the debt with the rental income doesn’t lower your taxes. You have to report the income no matter how you use it. 

You might need to change your investing strategy so that you are investing in a appreciating property vs  cash flow properties. 

An appreciation is not taxed, but the net income is. Generally, property with the most appreciation potential will not generate much cashflow, at least in my market.