Taking advantage of the potential tax benefits of buying property through a self-managed super fund (SMSF), a growing number of South Australians are turning to property for their retirement savings needs.
That's according to Beyond Today managing director Adam Wright, who said following the downturn in equity markets and the lowering of the contributions caps by the Government, he had seen a number of recent sales to individuals and couples seeking a "greater choice in their investment options".
"The recent Australian Taxation Office decision to relax the gearing strategy regarding repairing and refurbishing properties bought through SMSFs has certainly resulted in a growing number of investors wanting to purchase a block of land and build on it, providing the contract is settled after the house has been constructed," he said.
Many people are also attracted to the policy changes that allow SMSFs to borrow money for property assets, with trustees typically looking to purchase a property ranging between $400,000 and $700,000, Wright added.
"Most people understand that buying an investment property outside of superannuation attracts significant capital gains tax when it is eventually sold, but if the same property is held within a superannuation fund arrangement, then tax can be reduced to nothing, provided the property is sold after the superannuation reverts to the pension phase," he said.
