Want Your Tax Refund Sooner? Here’s How PAYG Withholding Variations Can Help

If you own an investment property — or a few — chances are you’re no stranger to a big tax refund come July. Between interest on the mortgage, property management fees, insurance, and depreciation, you’re likely to have accrued thousands, or even tens of thousands, in deductible expenses throughout the financial year.

But here’s the thing: you don’t have to wait until tax time to see the benefit. With a PAYG withholding variation, you could start seeing that money in your regular pay — right now.

So, What Is a PAYG Withholding Variation?

It’s a request you (or your accountant) lodge with the ATO to reduce the amount of tax taken out of your wages throughout the year.

To learn more, click here PAYG Withholding Variations

Why? Because you know you’ll be getting that tax back later anyway — this just means you get it as you go instead of all-in-one lump sum at tax time. This strategy is especially useful if you have:

• One or more negatively geared investment properties;
• High tax-deductible expenses throughout the year; and
• A decent refund coming your way and you’d rather have that extra cash flow now.

Real clients are using PAYG withholding variations and here’re ways they are taking advantage of it:

• Cover rising mortgage repayments;
• Pay down non-deductible debt faster;
• Boost their savings; and
• Reinvest into their next property.

How it Works?

In simple terms, there are two main ways in terms of how PAYG withholding variation works:

1. Downward variations – Most common. You reduce the tax being withheld from your pay to better reflect the deductions you’ll be claiming.
2. Upward variations – Less common but used if your investment is positively geared and you want to avoid a tax bill later by increasing your PAYG withholding.

It can however be a complex taxation strategy as it involves the following key considerations:

• The variation lasts for one financial year — so you’ll need to renew it each year;
• It’s important to get your estimates right (a wrong estimate can mean a larger than expected tax bill at tax time); and
• It can be a complicated process to navigate and require specialist taxation knowledge.

The best approach? Work with an accountant who understands your situation and can prepare it properly

Let’s Help You Get Started

Not sure if this is right for you? Or worried about getting the numbers wrong? That’s exactly what we’re here for.

Book a free, no-obligation chat with one of our taxation accountants – we’ll talk through your numbers, assess whether a PAYG variation makes sense for you, how you can best take advantage of it and take care of the paperwork if you want to go ahead.

To book in your free, no-obligation appointment:

• The Hopkins Group – 15 Quick Chat
• Request a Call-back

It’s your refund — why not get it sooner?