Should I sell my investment property and put the money in super? It depends on a range of factors!
HTML-код
- Опубликовано: 8 фев 2025
- Financial Planner Luke Smith joined 2CC Talking Canberra 1206AM in Money Matters, which aired live on Friday 7 June 2024. With the end of financial year just around the corner, this weeks topic looks at the issues around selling your investment property and putting it into super. There are some reasons to consider this strategy, especially if you’re approaching retirement age. Thank you for joining us live on 2CC or your favourite podcast streaming service.
Key topics covered include:
What are the things to consider around keeping an investment property?
What are your needs given the value of the asset?
What is the true yield (net income) of your investment property? Don’t just look at the rent, there’s costs too, rates, insurance, strata, and so on.
What is the cost structure of the investment property?
What’s the best use of those funds?
Is liquidity important to you? Do you have things you’re planning to spend money on?
How much can you put into super? Can you claim a tax deduction to offset a capital gain if you have one?
Think about timing to make sure you can sell your property and get it into super.
Luke shares his top tips around selling an investment property, super and retirement planning. Seek advice if you need help.
Have you thought about selling an investment property before you retire?
Luke as a Financial Planner can help you set up a financial planning strategy to help you achieve your personal financial goals, including investment, super and retirement. Make an appointment to confidentially discuss your goals. Call Envision Financial Services on 6260 4749. You can use the contact us form to make an appointment, for a confidential discussion about your situation.
Luke will return to 2CC to talk about other ‘Money Matters’ next week. You can catch up with ‘The Strategy Stacker - Luke Talks Money’ podcast at a time that suits you.
Luke’s book Smart Money Strategy is out now. For more information visit: thestrategysta...
Follow us on RUclips: / @thestrategystacker
Follow us on Facebook: / envisionfinancial1
Follow us on LinkedIn: / luke-smith-26a4ba16
Follow us on TikTok: / thestrategystacker
Follow us on X: / envisionadvice
Listen on Spotify: open.spotify.c...
Listen on Apple Music: podcasts.apple...
Listen on iHeartRadio: www.iheart.com...
What to hear about a specific financial planning topic?
Ask Luke your question here: thestrategysta...
Watching from Perth. Love your work Luke. Keep it up 👍⭐💰
Excellent
Really enjoyed this video and the main focus on income versus capital growth as you head into retirement.
@@michaelcrossley5917 a combination of income and growth is vital for cashflow and longevity. It's why an industry fund kills as they pay no dividends and don't give you active use of franking credits
Hi Luke, my partner and I have recently retired, I've just turned 60 and my partner is 62. Instead of selling one of our investment properties (the property under consideration is owned in my partners name) which is mortgage free and being rented on the short term rental market to maximise returns and control over the property, I've been thinking about taking out a reverse mortgage on this property to fund lifestyle things. This appears to have a number of advantages for our situation, i.e no loan payments have to be made until the property is sold (or she passes away) and we can either take out lump sums or receive a steady cashflow or a combination of both which appears very flexible. We can even pay money back into the loan to reduce its balance. There is no potential for negative equity or recourse under the legislation and any residual value of the property goes to our estate for distribution, and in the mean time the property is expected to increase in value over time, which potentially leaves the property worth the same amount (in headline dollar terms) in future years, even though we have spent some of the equity now. It seems that this would allow us to "sell a bedroom" to fund lifestyle purchases without having to sell the whole house and thereby triggering a CGT event. My partner would probably have a CGT amount of around $100k (after the 50% CGT reduction and after a capital gains "paper loss" of $45k from the sale of another investment property) to be added to her rental property income and defined benefits pension, meaning a sizable chunk of real money would be paid should this CGT event occur, even though she has stopped working for an employer and is retired.
Of course since the original mortgage has already been paid off the new loan would not become tax deductable even though it is an income producing property (unless the equity released was wholley spent on an income producing asset) but she has no loan repayments to anyway. The reverse mortgage would give access to some of the capital, and the interest rate seems no worse than if it was for any other no doc loan, as you don't have to substantiate any income to pay the loan as no payments are required to be made except when the property is sold or the property owner dies.
I've made a comment on one of your previous videos about my thoughts of when a capital gain is not really a capital gain, because inflation is not taken into account when determining capital gains tax. So my theory is by not selling an investment property and instead taking out a reverse mortgage, you get the benefit of fractional access to the value of the investment property, not having to make any payments on the loan (nominal payments are capitalised) and the capital gains can is kicked along the road until you die and then what is left over is what your beneficiaries get, (which is money they haven't worked for in any event) so there is only an upside for everyone.
Our other thoughts are to sell this investment property, she takes the capital gains hit, put the rest into super (splitting it between us both to maximise any concessions available) and then withdraw the money from super as either lumps sums or income streams, tax free, as needed. Advantages are not having to manage the property i.e. booking management, laundry, cleaning, maintenance, capital works, dealing with the latest governements short term thought bubbles affecting long term investment planning and the like.
What are your thoughts?
Thanks for your message. Unfortunately without knowing your personal situation it would be inappropriate for me to comment about parts of the above message.
I would note that you should be very careful with a reverse mortgage as I have seen instances where they have compounded out of control and impacted the next generation when it comes to estates.
She may be able to make personal contributions to super and use catch up rules to lower the CGT impact but again it’s a what if situation.
Very interesting video,very informative.
@@raysmith6068 thankyou for the feedback really appreciated. Make sure to subscribe for more content.
Spend your money by enjoying your life. You might not have it much longer.
Hi Luke. Question - can you make contributions into your super fund and claim it as a concessional deduction when you’re not working?
Totally of your under 67 no problem. You can you the catch up rules also.
Hi Luke, I am thinking of disposing my investment property. I just turned 60 and not working. My super balance is above the cap to use the previous 4 years concessional contribution.
My query is can I withdraw from super this financial year to reduce the balance and contribute to super in next financial year after disposing the asset where I could reduce cgt.
Is this legitimately possible, appreciate your opinion.
Thank you.
you are allowed to take money out of super if you have quit work over 60, if your balance was below $500,000 at 30.6.2025 you should be able to use any catch-up space you may have to make a concessional contribution in the 25/26 financial year when you sell the property to help address CGT. You may then be able to take the money out of super again after the deduction has been claimed if needed or add the proceeds from the sale of the property as a non-concessional contribution and start a tax free pension. Just something to think about.
@@thestrategystacker Thank you and appreciate it. Yes I quit work in June 2021.