Everything about parking space investment: mortgages, deed types, tax implications, and investment tips.
Complete GuideParking spaces are classified as non-residential properties, so the maximum loan-to-value ratio is typically 50%. Some banks may offer up to 60% for parking spaces bundled with residential units in the same estate. Interest rates are generally higher than residential mortgages.
Joint deed means the parking space shares the same title deed with the residential unit, making it easier to get higher mortgage ratios. Separate deed means the parking space has its own independent title, which offers more flexibility for separate sale but typically has lower mortgage ratios and higher stamp duty.
Key factors include: location and demand (residential vs commercial areas), management fees, rental yield potential, future development plans in the area, and the ratio of parking spaces to residential units in the estate. Areas with limited parking supply typically offer better investment potential.
Rental income from parking spaces is subject to property tax (15% of net assessable value). If you're running it as a business, profits tax may apply. Stamp duty for parking spaces follows non-residential property rates. Interest expenses may be deductible against rental income.