BENEFITS
ASSET PROTECTION:
Subject to the specific anti-avoidance rules in legislation such as the
Corporations Act and the Bankruptcy Act, acquiring and accumulating assets
in a superannuation fund can protect those assets from commercial and
litigation risks that may otherwise face the members.
And since the Equiti Warrant structure allows for the
title of the property to be held in your name as trustee
(or in that of a trustee company that you control) any growth and future
income may be enjoyed in a safe, secure and Bankruptcy Act friendlyenvironment.
TAX EFFICIENCY:
The current Australian taxation laws offer significant tax benefits for acquiring growth assets in superannuation:
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There is a maximum of 10% capital gains tax on the sale of your property if it is held for over 12 months in the accumulation phase and ZERO capital gains tax if you sell your property in the pension phase; |
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There is a maximum of 15% tax on any rental income received during the accumulation phase and 0% tax for rental income received in the pension phase; |
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By salary sacrificing into your SMSF, you effectively receive a 100% tax deduction at your full marginal rate of tax on contributions made up to your contributions cap (note: salary sacrifice contributions may be subject to up to 15% tax); |
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The interest expense along with other property related expenses including any depreciation allowance become 100% tax deductible within the superannuation fund and may potentially reduce the amount of your 15% contribution tax to NIL ; |
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It is much more tax effective than simply ‘negative gearing’ as, after your 15% contribution tax, you can use your tax deductible contributions to make both principal and interest repayments (by using your pre-tax dollars to make principal repayments, you can own your property sooner by having the tax-man helping you to pay itt off); |
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You you may potentially receive a more tax effective retirement income as compared to property investment held outside of superannuation as once you are over the age of 60, there is ZERO TAX on withdrawals and pension income from your superannuation; |
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Your SMSF, as the beneficial owner of the property asset, enjoys the Land Tax Threshold in each Australian State. |
Currently, legislation limits the amount which a member can
invest in superannuation annually. By borrowing, the superannuation fund
is in a position to increase the value of the assets it holds. All future
growth will be within a superannuation environment where the taxes will
be at a maximum of 15% and can potentially be zero.
Up until the recent changes in SIS, many superannuation portfolios were
devoid of the many potential benefits of direct property investment due
to their inability to borrow money.
As a result, many Australians have had no choice but to invest in real estate
outside of the tax-efficient superannuation domain and had lacked the ability
for their superannuation portfolio to potentially generate greater returns
through a geared SMSF investment strategy.
With Equiti Warrants, you no longer need to wait for your superannuation
fund to grow to the full purchase price of your desired property and miss
out on many years of potential capital growth.
Use your current SMSF (or a newly established SMSF) to acquire
real estate assets and begin building your own direct superannuation property
portfolio in preparation for a wealthier retirement.