First National Real Estate

GLOSSARY OF TERMS Lease/ tenancy agreement Is an agreement for possession, not ownership, of a property for a set period. Lessee/tenant One who leases/rents a property from a lessor owner Tenancy Agreement document Sets out details of the property to be rented and the terms and conditions agreed to between landlord and the tenant. Landlord Is the owner of property being rented Negative Gearing Is where the costs associated with your property investment exceed the income received over the tax year. This loss can be used to offset other income in that year’s tax return. Net Yield Is the income on your property less certain expenses such as rates, insurance, maintenance and body corporate levies. Depreciation Is a non-cash allowance that you may be able to claim on your tax which reflects the limited life of an asset. Capital Gains Tax Is the tax based on the difference between the purchase and selling price, less inflation, applied upon the sale of an investment property. PROPERTY MANAGEMENT GUIDE 34