The Ultimate Perth Property Investment Guide

Executive Summary

Annual Yield

Total rental income divided by property value, expressed as a percentage. Example: $44,200 rent ÷ $1,000,000 value = 4.42% yield.

Capital Growth

Increase in property value over time. Calculated as (Current Value - Purchase Price) ÷ Purchase Price × 100.

CGT (Capital Gains Tax)

Tax on profit from property sale. Australian residents receive 50% discount if held over 12 months; foreign investors pay full marginal rate.

Depreciation

Tax deductions for wear and tear on building (2.5% over 40 years) and fixtures (various rates). Requires quantity surveyor report.

Dual-Key Property

Two separate, self-contained dwellings on one title with independent entrances, kitchens, and bathrooms. Common config: 3×2 + 2×1.

FIRB (Foreign Investment Review Board)

Australian government body regulating foreign property ownership. New dwellings exempt from approval; established properties require approval ($13,200 fee under $1M).

Green Title

Freehold ownership of land and building with no shared ownership or strata fees. Owner has complete control over the property.

Gross Yield

Annual rental income ÷ property value, without deducting expenses. Perth dual-key average: 8.5%.

Granny Flat

Secondary dwelling on same lot as main house, typically 1-2 bedrooms. Also called ancillary dwelling or secondary dwelling.

LMI (Lenders Mortgage Insurance)

Insurance protecting lender if borrower defaults, required when LVR exceeds 80%. Cost: $15,000-$40,000 depending on loan size and LVR.

LVR (Loan-to-Value Ratio)

Loan amount ÷ property value. Example: $800,000 loan on $1,000,000 property = 80% LVR. Most lenders prefer 80% LVR for investment properties.

Negative Gearing

Tax strategy where property expenses exceed income, creating tax-deductible loss. Reduces overall tax liability but requires cash flow coverage.

Net Yield

Rental income after expenses (management, rates, insurance) ÷ property value. Typically 2-3% lower than gross yield.

Off-the-Plan

Purchasing property before construction completes, based on plans. Benefits: lower price, customization options. Risks: value changes, completion delays.

Property Management

Professional service handling tenant relations, rent collection, maintenance, and inspections. Fee: 6-8% of rental income in Perth.

REIWA

Real Estate Institute of Western Australia - industry body providing market data, training, and consumer protection.

Rental Appraisal

Professional assessment of achievable rent for a property based on comparable rentals, property features, and market conditions.

Rental Vacancy Rate

Percentage of rental properties unoccupied. Perth: 0.9% (Feb 2026) indicates extremely tight market favoring investors.

Settlement

Final property ownership transfer, when balance of purchase price is paid and keys are handed over. Typically 60-90 days after signing contract.

Stamp Duty (Transfer Duty)

State government tax on property purchases, calculated on sliding scale based on value. WA: approximately 4% on $800,000 property.

Strata Title

Ownership of unit/townhouse with shared common property. Requires payment of strata fees ($1,500-$5,000+ annually) to owners corporation.

Subdivision

Dividing one land parcel into multiple titles. Allows separate sale of main house and granny flat, maximizing future flexibility.

Turnkey Package

Complete property solution including land, design, construction, and project management. Investor receives finished, rent-ready property.

Vacancy Period

Time between tenants when property is unoccupied. Perth average: 7-14 days in current market. Budget 2-4% annual vacancy.