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Wholistic Financial Solutions provides a lot of essential information and updates regarding the property investment industry. Check this page for the updates.

Buying Property through a SMSF

Friday, July 27, 2012

Buying Property through a SMSF

If you are looking to control your Super and are unhappy with your Industry Super Fund returning consistent poor or negative returns like many other Australians you now have more options in regards to a SMSF.

In 2007 the Australian Government made it possible for ordinary Australians to borrow money to buy property in their SMSF.

Before setting out on this journey you must ask yourself 3 simple questions as everyone's goals will differ and each of us is in a unique financial position.

  1. Do you have an Existing Industry or Platform Based Super Fund with a combined minimum balance of $80,000?
  2. Are you looking to control your Super Fund Investments?
  3. Are you looking for a low cost Self-Managed Superannuation Fund Solution?
  4. If so contact us at WFS Canberra for your free SMSF Consultation to see if buying a Property in an SMSF will work for you. www.wfscanberra.com.au

Why not own property through a SMSF?

Friday, July 27, 2012

Why not own property through a SMSF?

Many people feeling depressed and out of control due to the recent turmoil in global financial markets are looking for different ways to invest their superannuation.

How does a SMSF work?

It works very much the same as a other superannuation funds. It accepts contributions from members, and invests and manages those contributions and subsequent earnings.

You become the trustee of the SMSF and are involved in all the decision made by the fund. This means you are responsible for tasks such as administration and accounting, managing tax implications and ensuring an investment strategy is in place. However, SMSF professionals at WFS Canberra www.wfscanberra.com.au are able to complete all of the administrative tasks for you and assist you in every aspect of running your fund.

What are the benefits of a SMSF?

- You have control over how and where and when your money is invested.
- There can be fee savings if you use the services of WFS Canberra.
- The potential to use tax savings strategies not possible in other types of funds.
- Purchase your business' real property.

- Puchase residential investment property

Amendments to the Superannuation Industry (Supervision) Act 1993 ("SIS Act"), effective from 24 September 2007, allows superannuation funds to borrow money to acquire any asset which a SMSF is permitted by law to acquire directly, which includes Property

Case Study: Borrowing to Purchase Residential Investment Property

Assumptions:

Josh is 48 years old.
Josh is looking to purchase an investment property for 400,000 (net 5% yield).
Josh wants to fund the investment property through an quity line of credit against his principal residence.
Josh has accumulated $200,000 in superannuation and has a SMSF.
Josh could fund the investment property purchase though his SMSF with himself as the lender to his SMSF.

 

Benefits:

The benefits of Josh owning the investment property in his SMSF are substantial:

 

                                                        Individual                                 SMSF

Rental Income (30yrs)                          $878,054                                $878,054
Interest Expense (30yrs)                      ($780,000)                              ($585,000)
Rental Tax Liability/Benefit (30yrs)        ($40,692)                                ($9,921)
Capital Gain on Property                      $418,563                                 $418,563
CGT Payable                                      ($86,852)                                 $0  

Total Return                                        $389,073                                $701,696

Structure Benefit                                                                              $312,623

* Key Assumptions:
5% rental yield
2.5%pa rental growth
5%pa capital growth

Canberra's Property Market Outlook

Friday, July 27, 2012

Reports are showing a more positive outlook for the ACT property sector despite continuing concerns about the Federal political environment and the outlook for economic growth in the Territory.

 

The Property Council of Australia-ANZ Property Industry Confidence Survey showed a shift in sentiment from 94 on the index for the March quarter to 101 for the June quarter. A score of 100 on the index is considered neutral. 

Catherine Carter, Property Council ACT Executive Director says the latest Survey shows the ACT was the only state or territory that recorded a shift from overall negative sentiment in the March quarter to positive sentiment in the June quarter.

Confidence in house price growth has also shifted from a negative outlook to a positive outlook between the two quarters.

Confidence index jpg April 2012

ANZ Head of Property Research, Paul Braddick, says ACT respondents to the survey had a “moderately balanced view of the property sector, with a confidence index of 101, reflecting an uncertain outlook for ACT employment with the existing budget pressures and a sharp unwinding of the boom in dwelling construction through 2011.”

Canberra's Property Market Outlook

Friday, July 27, 2012

Reports are showing a more positive outlook for the ACT property sector despite continuing concerns about the Federal political environment and the outlook for economic growth in the Territory.

 

The Property Council of Australia-ANZ Property Industry Confidence Survey showed a shift in sentiment from 94 on the index for the March quarter to 101 for the June quarter. A score of 100 on the index is considered neutral. 

Catherine Carter, Property Council ACT Executive Director says the latest Survey shows the ACT was the only state or territory that recorded a shift from overall negative sentiment in the March quarter to positive sentiment in the June quarter.

Confidence in house price growth has also shifted from a negative outlook to a positive outlook between the two quarters.

Confidence index jpg April 2012

ANZ Head of Property Research, Paul Braddick, says ACT respondents to the survey had a “moderately balanced view of the property sector, with a confidence index of 101, reflecting an uncertain outlook for ACT employment with the existing budget pressures and a sharp unwinding of the boom in dwelling construction through 2011.”

Australia's Property Market outlook

Friday, July 27, 2012

Housing market to remain soft: NAB survey

Australia’s housing market is predicted to remain soft over the next year, with a NAB survey predicting a decline in house prices of 0.7 percent.

NAB’s Residential Property Index fell in the June quarter, dropping to -11 from +5 in the first quarter, weighed down by weaker conditions in Victoria and NSW.

The survey polled around 300 real estate agents and property managers, property developers, asset and fund managers, and owners/investors.

Victoria (-43), SA (-15) and the NT (-15) posted the lowest scores on the index, while WA (+34) and Queensland (+2) are the only states in positive territory.

NSW slumped dramatically over the period, from +28 in the previous quarter to -13 by the end of June 2012. Victoria’s index score moved further in the red, from -16 to -43.

Key findings of the report include:

  • National house prices fell by 2 percent in the June quarter, with the biggest falls in Victoria (2.9 percent) and NSW (2.3 percent). They are expected to fall by 0.7 percent nationally over the next year, but grow by 1 percent over the next two years
  • Average national rent growth slowed to 0.4 percent in the June quarter, down from 1.1 percent in the first quarter of the year. The long term outlook is for softer rents in all states over the next two years, except for WA
  • Respondents indicated tight credit conditions and housing affordability are the most significant constraints on new housing development. Employment security is now viewed as the biggest impediment to purchasing existing property, especially in Victoria and Queensland
  • Capital growth expectations are strongest in the sub-$500,000 price range, while the outlook for properties worth more than $2 million remains poor

Year End Tax Tips for Property Investors

Friday, June 29, 2012

Year End Tax Tips for Property Investors

n  Documentation – when it doubt – keep the record anyway so your Accountant can claim it if possible.

n  Depreciation – Have you got a depreciation report for every property?  If not, get one.  It is free cash in your pocket.  We use a company that guarantees more cash to you than the report costs

n  Travel – ATO accepts 4 trips per year to the property and maybe more if justified.  Keep travel expenses and diaries.

n   Interest Expenses  - Learn how to maximise tax deductible debt and minimise non tax deductible debt

n  Pre-Pay Expenses – interest & other expenses can be pre-paid 12 months in advance

n   Manage Capital Gains & Losses – if you are selling a property speak to your Accountant first.  An Accountant experienced in CGT can save you hundreds of thousands of dollars by correctly planning Capital Gain

n   Manage Capital Losses – if you are selling an Asset for a Gain are these any Assets you can also sell for a loss to help you minimise the gain?

n   PAYG Variation – get it done now ready for next year. Extra cash in your pocket per fortnight.

Little known Tax Tip for Year End Planning for Business

Friday, June 29, 2012

Little known Tax Tip for Year End Planning for Business

 Increased Instant Asset Write-Off Threshold for business starting July.  Assets costing under $6,500 will be able to be claimed outright rather than depreciated.  This is up from the existing $1000 rule.  So you may want to delay any large purchases till next week. 

Year End Tax Tips for Property Investors

Friday, June 29, 2012

Year End Tax Tips for Property Investors

n  Documentation – when it doubt – keep the record anyway so your Accountant can claim it if possible.

n  Depreciation – Have you got a depreciation report for every property?  If not, get one.  It is free cash in your pocket.  We use a company that guarantees more cash to you than the report costs

n  Travel – ATO accepts 4 trips per year to the property and maybe more if justified.  Keep travel expenses and diaries.

n   Interest Expenses  - Learn how to maximise tax deductible debt and minimise non tax deductible debt

n  Pre-Pay Expenses – interest & other expenses can be pre-paid 12 months in advance

n   Manage Capital Gains & Losses – if you are selling a property speak to your Accountant first.  An Accountant experienced in CGT can save you hundreds of thousands of dollars by correctly planning Capital Gain

n   Manage Capital Losses – if you are selling an Asset for a Gain are these any Assets you can also sell for a loss to help you minimise the gain?

n   PAYG Variation – get it done now ready for next year. Extra cash in your pocket per fortnight.

Tax Saving Tips for Year End

Friday, June 29, 2012

Year End Tax Tips for Individuals and Businesses - Save Tax Now - Hurry ends 30 June

n  Delay Income – invoice or get paid after 30 June

n  Bring forward expenses

n  Prepay Expenses up to 12 months in advance

n  Maximise Concessional Super Contributions – up to $25,000 or last opportunity for those over 50 to contribute $50,000

n  Maximise Medical Expenses as thresholds change next year

n  Utilise the Super Co-Contribution –for the last time the Government will match up to $1000 -  reducing to $500 from 2012

See www.wfscanberra.com.au/ for more info

 

Tax Minimisation

Wednesday, June 27, 2012

Individuals looking to maximise their superannuation dollar, who will earn less than $61,920 in the 2011/12 financial year should look to make an after-tax contribution to their superannuation to qualify for the Government Co-Contribution.

At present the government will match after tax contributions dollar for dollar up to a maximum

of $1,000 for a person earning up to $31,920. The maximum then reduces by 3.333 cents for every dollar of total income, less allowable business deductions over $31,920 reducing to nil at $61,920.

From 1 July 2012, the maximum co-contribution payable will be halved to $500 a year


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