Are you a property investor? Are you purchasing property in a Self Managed Super Fund (SMSF)?

If you are a property investor and you are investing in real estate then you should consider having more than one self managed superannuation fund (SMSF).

In New South Wales the threshold for land tax is $432,000. That is for every dollar of land value over this amount there is 1.6% land tax plus $100 payable. Note the $432,000 is the threshold for the value of the land not the value of the property. Many if not most freestanding properties in Sydney would have a land value exceeding $432,000 as the medium house price is now $1 million.

Accordingly if you had two properties with total land value of say $800,000, and you had two SMSF’s the land tax would be $zero. On the other hand if the two properties where owned by the one SMSF the land tax would be $5,988. The compliance cost of the second superannuation fund would be unlikely to exceed $2,000, leaving a net saving per annum of $3,988.

Should you be considering purchasing property through a SMSF or require any further information, please contact Peter Quinn by submitting an online enquiry or calling us on +61 2 9580 9166 to book an obligation free appointment.

The information in this document does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness having regard to these factors before acting on it. It is important that your personal circumstances are taken into account before making any financial decision and it is recommended that you seek assistance from your financial adviser.