Investopoly Q&A: Super vs property, CGT, tax-effective loan structure, children in a SMSF and more...
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Dec 30, 2024 Explore the captivating debate between superannuation and property investments, unpacking the tax advantages of each. Learn about capital gains tax implications when converting an investment property into a residence. Discover strategies for structuring loans efficiently, especially for those with multiple properties. Hear insights on including adult children in self-managed super funds. For expats, understand the tax landscape when investing in property and the importance of navigating financial choices during family planning. Packed with practical advice!
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Super vs Property Investment Advice
- Continue investing spare cash mainly into maximizing concessional super contributions and ETFs as it's been easier and more successful.
- Consider property only for diversification if budget and market conditions allow, focusing on quality assets and viable locations.
CGT When Rebuilding Investment Property
- Capital gains tax on a property converted to principal residence after being investment is apportioned by days.
- Cost base includes purchase price plus rebuilding costs, reducing taxable gain the longer you live in it.
Apportioning Loan Repayments
- When repaying loans used for multiple investment properties, repayments must be apportioned between properties.
- Consider restructuring loans to separate assets before sale to maximize tax benefits and control sale proceeds.