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Super changes shouldn’t deter SMSF property investors

Over the past 3 years we’ve kept reading about the huge wave of investors about to use their self-managed super funds to buy residential investment property. And we’ve seen them enter the market in small numbers, but it’s hardly been a tsunami. No doubt one reason is the lack of certainty created by a changing legal landscape.

The government’s now made new announcements to the pension rules for self-managed super funds. An SMSF will remain exempt from paying tax until the final pension payment is made, which may be some time after the death of the member.

The SMSF industry has been battling with the Tax Office for this change since 2004 and see it as an improvement. But yet another change offering more complexity will no doubt leave many feeling the Government is always changing the SMSF rules.

Director at Powers Superannuation Services, Charles Page, says there are other changes happening with Super but owning your properties through an SMSF does provide tax concessions.

“Despite all of the rule changes directed at Super, it remains the only investment vehicle where, with the right structure, you are able to pay no tax on your rental property income.  With purchasing property, it is often the case of having the right structure for your property ownership to suit your needs.”

As real estate agents we’ve seen a number of SMSF buyers ready to sign contracts for a great property, only to have their advisers tell them they’re not organized or ready. It’s no doubt a complex field, but the tax concessions may make it well worth the time to navigate your way.

PS: as always, please talk to a qualified advisor and don’t look to your real estate agent for tax and legal advice!