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SMSF thrown into spotlight

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Your Investment Property | 12 Sep 2012, 02:28 PM Agree 0
An industry group has warned that the Labor Government may be considering cutting tax breaks for SMSFs in order to pay for its policies on education and disability
  • Property Mavens | 14 Sep 2012, 11:17 AM Agree 0
    This is a typical example of the Labour Government being unable to manage the financial affairs of the nation. Governments repeatedly tell voters to take responsibility for their retirement and yet the Labour government continues to steal from the superannuation pot every chance they get, for every stupid or unfunded idea that they have. The Rudd government reduced the MDC levels by a whopping 50% to compensate for the $1000 gift they gave after the GFC and to ensure they end up with a surplus in 2013. When are the Labour government going to figure out that the country, industry and retirees benefit when people invest for their super, rather than the constant reduction and progressive elimination of incentives that encourage them to do so. Do they really want everyone to get to the point where they decide they may as well use the money now, as there is no financial incentive to store it away for the future ?
  • Muriel White | 15 Sep 2012, 09:28 AM Agree 0
    How can people plan when the Government keep changing the rules? My husband and I have worked hard all our lives and we opened a SMSF as we will not be eligible for the aged pension. If they start taxing it I think we will pull out and just live off our money till it runs out. The Government needs to look after self funded retirees as they save them a bucket!!!!!!!!!!!!!!!!!!
  • Frank Miller | 18 Sep 2012, 09:34 AM Agree 0
    I'm considering buying an investment property through my SMSF but am not sure where to turn for advice... Should I talk to an accountant first? A broker? A real estate agent? Anyone have any suggestions?
  • Kris Kitto | 30 Oct 2012, 11:55 AM Agree 0
    So far the SMSF honey-pot has remained untouched - with the exception of the SMSF Supervisory Levy increased which is going from $191 to $259 in 2013/14 (currently $200 for 2012) as announced in the MYEFO last week.

    I am always asked the question of 'why should I invest via super when the government keeps changing the laws?'. Good question.

    Generally government policy encourages people to save for their own retirement - i.e. easing the burden of an ageing baby boomer population - yes - I know it is hard to see it with the reduction in concessional contribution caps to a pathetic $25k - but the big picture is the same. Another important thing to realise is that the SMSF has a very strong voice and the government listens.

    I also recommend anyone with a SMSF join the Australian SMSF Members Association (ASMA - to ensure their voice is heard.
    To answer Frank's question, don't worry too much about what the title of the person is - you just need to find someone who knows what they are talking about. I am assuming you are looking to borrow within you SMSF which is why you asked about a broker.

    You already have a SMSF, so your accountant should be able to tell you what you can and can't do with property in a SMSF (especially where borrowings are concerned) i.e. they can help you on the compliance side.

    Mortgage brokers may be useful is they have knowledge and experience with limited recourse borrowings (SMSF loans). They can help the process alone and give you an idea of the loans available and applicable costs.

    Hopefully you have some agents on your contact list that can help you find the type of property you are looking for, however it is unlikely they will have detailed knowledge around SMSFs (although it would be nice). Their role is different - i.e. sell you the property!

    The ideal person to engage is a financial planner / adviser who can provide strategic advice. A few reasons for this:
    Firstly, then will ensure you are focussed on what you are trying to achieve - which is hopefully wealth creation.
    Secondly, they can act as the primary driver of the process and liaise with you, the agent, the broker lawyer and accountant. My experience shows that you need one central person driving the process. Thirdly, most SMSF lenders require a sign off by a financial adviser to ensure you get independent advice before entering the borrowing arrangement - use this to your advantage to have a financial planner run some independent analysis on a potential property purchase to ensure it stacks up.

    After reading the above you probably assume I am a planner - wrong, I am a simple accountant.

    Also be extremely cautious of an individual or business who says they can do everything - i.e. source the property, arrange the loan, do the advice, set up the SMSF, sell you insurance, do the property management, do the conveyance etc etc. You need transparency from the professionals you deal with so you know who is getting paid what. If a business has too many fingers in your super pie, chances are they may not be looking after your best interests.

    The best thing you can do is educate yourself and keep your eyes wide open.
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