An interesting article written by Bob Korver for Smart Property Investment lists the key elements investors must know before buying a property using their self-managed super fund.
The article states that one of the best things about buying property through your (SMSF) is the low tax rate, currently at 15 per cent. But it’s not just the low tax, there are still two more important factors that you should take note of before investing your SMSF.
I just came across a new report from CoreLogic that says that residential rents in Sydney are at their lowest level on record – averaging just 3.1 per cent in April 2016.
Low rental returns can be a sign that property investors are relying heavily on negative gearing to offset their cash flow losses against their taxable income.
There is another easy way to improve cash flow that has nothing to do with negative gearing. Yet according to statistics, a stunning 80% of people investing in apartments are failing to use it.
If you have lines of credit and if, additionally, you have a property investment portfolio, there is a common and a frequently occurring error you should not forget about in a hurry. Certainly when the error can cost a great deal to rectify!
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Australians stand to save a whole lot of money (and I mean real cash) if they can be more heedful towards the way they treat their tax returns. Australians cannot shy away from their housing debt and using the tax returns to service their debt can be one brilliant strategy.
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Investors love the idea of capital growth. This said they are not averse to the concept of high rental yield either. In fact, things boil down to how a particular investor is planning his portfolio. Negative and positive gearing both have their merit after all? I will be none the poorer by elaborating on this subject….hasn’t gearing caught public attention for a long while?
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There are many who feel that negative gearing should be abolished. On the other side of the spectrum, there are many loyalists of the method too. Of course, some keep a moderate attitude. Pete Wargent for the Property Update writes a compelling piece wherein he also illustrates the impact of negative gearing through a few live examples.
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I wrote an article recently wherein I summed up how fee and taxes (please include Stamp Duty too) are among the prime buying concerns today. Well! I assume this article then will have its fair share of readers. While you can always claim a few tax benefits as a real estate investor, you should be ready to pay a few taxes just as well (I guess more than a few).
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Going by an article on the website Smart Property Investment, fee and taxes are prime concerns of home buyers. According to the article, a highly esteemed loan comparison website, finder.com.au, evaluated 7,000 questions on home loans (those which were posted in its forums). The website inferred that maximum concerns were related to fee. Fee included set-up fee as well as loan pre-closure fee.
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This year the tax office will breathe fire on property investors. Each stratum of investor- newbie, mid-sized portfolio holders, investors high on net worth- will be covered in the crackdown, says Michael Yardney in an article for the Property Update.
After all, the Tax Office has found its talisman- a vast repertoire of property data that was lying with the State Revenue Office for long. The records collected online can help in tackling the logistic challenges of such a big crackdown.
Being transparent and morally correct is the way out of the situation. If you are a new owner of rental property, file your returns carefully and in time. If you are a high net worth individual, remember that audits for your hierarchy have shot up from 680 to 1500.
Ambiguous payments made to contractors, nepotistic dealings made with kith and kin, and subtle transfers made via SMSFs, may all stand in the line of tax penalties.
You can read the whole article here.
Are you an expat investing in Australian properties? Have you checked with the Tax Office?
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Stamp Duty Looks Simply Out of Context
The government will take a few key decisions after it diligently analyses the tax structure prevalent in the country. The stamp duty- widely dubbed as the ‘worst form of taxation’ can come under the scrutiny, too. Andrew Jennings talks about the issue in an article for the website The Adviser.
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