A negatively geared property is one where the income (like rent) is less than the expenses (like loan interest and maintenance). This results in a loss that can reduce your taxable income, potentially leading to a tax refund if the property is in your name.
The total refund amount is the same, no matter which option you choose. However, here are some thoughts:
Waiting Until Tax Time: If you’re not confident in managing smaller refunds or worry about spending them impulsively, waiting for the lump sum might be better. This way, you can plan how to use the refund strategically.
Getting Refunds in Your Pay Cycle: This option improves your cash flow throughout the year. However, it’s crucial to manage the extra money wisely. For example, keep it in an offset account to reduce interest or reinvest it for further growth.
If you’re confident in managing your money, accessing your tax refund throughout the year can be a smart move to improve cash flow. But if you prefer the excitement of a lump sum or need time to plan, waiting until tax time might suit you better. Either way, make sure to use your refund strategically to maximize its impact on your financial goals.
