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If you’ve always wondered what negative gearing was all about but were afraid to ask, you can now finally make sense of the concept with this easy-to-understand guide by Eddie Chung.
It should come as no surprise by now that investing in property through a self-managed superannuation fund (SMSF), as opposed to other types of entities (eg individuals, trusts and companies), may have the potential to produce far greater investment returns due to the highly concessional tax environment under which SMSFs operate.
Around the time of the global financial crisis, many trustees of self-managed superannuation funds (SMSFs) took a defensive strategy and converted their investments to cash. As the property market slowly mends after a period of relative sluggishness, trustees of cashed up SMSFs are once again on the lookout for property investments in an attempt to beat anticipated property price rises. There are many reasons to invest in property through an SMSF. Some people opt to invest as part of their long-term investment strategy which will provide for their retirement one day. Others invest in commercial properties as premises for their businesses. Regardless, owning a property investment in an SMSF, as opposed to other types of entities, may give rise to higher investment returns due to attractive tax rules under which SMSFs operate.