SUPERANNUATION AND PROPERTY

It’s a tax thing!

Increasingly people are realising the benefits of investing in property through a self managed superannuation fund. Not only can they continue to build their property portfolios but they can also do it in a much better tax environment.

Let’s just take a brief look at this strategy, because as property specialists we see how it can add considerable extra value to your investments.

Of course, the basics are the same when it comes to choosing and buying a property, you must get the fundamentals right from the very start, regardless if its going in to a super fund or not.

So the opportunities and risks are the same, inside or outside super, however, the end game is where super funds are hard to beat.

While the rental income over the years helps with paying costs and eventually providing a long term income stream, as most property investors know the big payout is usually the capital gain — often several hundreds of thousands of dollars.

Unlike owning property outside a super fund — and paying tax on the income and the capital gain — once your super fund has switched over to pension mode (in some cases as early as age 55) no tax is paid either on the property’s income or, more importantly, on any of the capital gain when it is sold.

Until next week,

Jock Bing