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Catherines Chat

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

SMSF and Property

Monday, June 18, 2012

Hello All,

First you tube video has been uploaded:

http://www.youtube.com/watch?v=222bPwA2LxQ

 

Topics include Loans in SMSF. Property in SMSF, CGT in SMSF advantages in SMSF and DIY super. 

Hope you enjoy it!

feel free to suggest topics you would like me to discuss.

 

Catherine

 

Tax Saving Strategies / Super

Friday, June 15, 2012
If you have any spare cash now is a good time to consider boosting your 'concessional' superannuation contribution before 30 June.  Any contribution made is tax deductible and can save you tax.  Employee's need to contribute via salary sacrifice whereas self employed or retirees can contribute directly.   From 1 July onwards the contributions cap for over 50's is reducing to $25,000 so now is the time to consider whether to take advantage on the higher $50,000 cap that applies until June 30. For more information visit http://www.wfscanberra.com.au/

SMSF and Property

Friday, June 01, 2012

  A new battalion – property and superannuation join forces?

 

Since time immemorial it has been argued as to whether the benefits of gearing property investments outweighed the tax concessional environment offered by superannuation.  Now the battlefield has changed dramatically.  Why would you choose one over the other when you can have the best of both worlds.  New laws introduced in September 2007 allow Self Managed Superannuation Funds (SMSF’s) to, for the first time, buy geared property in a simple and uncomplicated manner.  SMSF’s can now select a property of their choice, be it residential or commercial, and borrow up to 80% of the value of the property. 

 

The most common investment strategy seen in the baby boomer era was to invest all surplus funds into accessible investments including property and shares and then cashing these in and contributing the funds into super just prior to retirement.  The only disadvantage of this strategy was a potentially very large Capital Gains Tax bill. 

 

However, this strategy has been dramatically hampered by the Governments new contribution rules which only allow $25,000 of concessional contributions per year.  

 

The effect of the new contributions rule is to significantly disadvantage generation X and Y.  It is fair to say that most young singles and young families have better things to do with their money and more pressing needs than to make the most of their $25,000 per year contribution limit.  Then when they are getting closer to retirement and have more surplus funds they will be prevented from, like their pre-decessors, making large contributions just prior to retirement.

 

Why would you buy property in a SMSF instead of personally?

 

For many reasons including;

 

  • you get the benefit of ‘leverage’,
  • a maximum of 15% tax on any rental income in excess of costs,
  • you receive a tax deduction for the loan repayments of principal (which is normally impossible) via salary sacrificing the amount required to cover the shortfall,
  • asset protection – the asset is protected from creditors in the event of a lawsuit or bankruptcy (some conditions apply),
  • the property can still be sold and the loan repaid at any stage,
  • any capital gains on the property when sold will be taxed at a maximum rate of 10% (if asset held for more than 12 months)
  • But the biggest incentive of all – if you keep the properties until age 60 and commence a pension from the fund,
  • any capital gain on the property will be TAX FREE,
  • any rent on the property will be TAX FREE,
  • any income paid out to you will also be TAX FREE.

 

The laws are only new and law complying products are now being introduced and marketed.  It is envisaged that these products will hit the market like a storm once investors realize the potential.  SMSF's are now the largest segment of the superannuation industry and it is likely that this figure will increase exponentially once knowledge of the loan products becomes widespread.  It is also interesting to note that this may be the first time in history that all advisors (financial planners, accountants, auditors, property advisors and mortgage brokers) have a common ground for advising clients.  All advisors have something to gain by assisting clients into these products. It’s not only a busy time ahead for advisors but a time to join forces and put a cease fire on the battle.

 

The team at Wholistic Financial Solutions can assist all trustee of SMSF’s consider this option in regards to borrowing to buy property within their super fund.   Come along to our free information seminar or request a free consultation to discuss your personal situation.  Call Catherine on 02 6162 4546

Social Media and Online Security

Friday, May 18, 2012

Hello All,

After reading this article from the ATO, I thought it wise to share with everyone.


http://www.ato.gov.au/onlineservices/content.aspx?menuid=41675&doc=/content/62347.htm&page=4&H4 


This ATO report tells you what they will NOT ask you. and what to do if you suspect a scam.

Social Media is filtering into more and more of society and is important to know what information should only be kept to yourself. 


Stay safe online with the new tax season coming soon!


Catherine

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Thursday, November 24, 2011
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Thursday, November 24, 2011
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Salary Sacrifice into Super to save tax

Thursday, November 24, 2011
Hi SS, Yes you can reduce tax by salary sacrificing into super. You can save your marginal rate of tax but your super fund will pay 15% tax. You should seek advice as, at your age, it may actually be more worthwhile paying off your home mortgage or focusing on building up investments outside super.

Tax Deadline is not 31 October - call WFS for help. 02 6162 4546

Friday, October 28, 2011
Hi all,  It is a misnomer that the tax deadline is 31 October.  Tax agents can lodge anytime up until next May.  BUT you need to be on our lodgement program before 31/10.  So call us now on  02 6162 4546 to register.

Real Estate Investar - Real Estate Software and Tools for Investors | Real Estate News | Consumer confidence rebounds 8.1%

Friday, September 30, 2011
Real Estate Investar - Real Estate Software and Tools for Investors | Real Estate News | Consumer confidence rebounds 8.1%

RBA can afford to sit tight on rates: IMF

Friday, September 30, 2011
RBA can afford to sit tight on rates: IMF

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