If you worry about your financial life in retirement then it’s time to take control to ensure that you can afford the lifestyle you want. Many people overlook using their super as a way of creating wealth as it appears complex. However, super is one of the most tax-effective ways to save money. The laws have changed over recent years around accessing your super so it’s worth taking another look at how you can use your super for wealth creation.
Investment loans Melbourne
We are a mortgage broker service based in Melbourne and enjoy working with our clients to help them purchase in one of the world’s ideal property markets. Melbourne receives regular acknowledgement as a great place to live through The Economists’ “World’s Most Liveable City” index and is known for having great infrastructure, a stable employment market and a vibrant, cosmopolitan ambience with plenty of significant sporting and cultural events.
Buying a first home or an investment property in Melbourne gives you piece of mind due its secure economic environment and healthy property market.
If you don’t have the upfront capital to purchase then consider an investment loan. An investment loan allows you to purchase an investment property to rent out and reap the benefits. The rent is used to service the loan and at the same time your investment property increases in value so you have an asset down the track.
Self-managed super funds
More and more Australians are taking personal control of their super to maximise their investment strategies and savings for retirement. Establishing a self-managed super fund is worthwhile if you are informed, committed and you have access to good advice. When you set-up a self-managed super fund you become a trustee of that fund and have greater control over the investment strategy, asset mix and day-to-day management of the fund. You can minimise the fees of your fund by being careful about the number of transactions you make and you can take advantage of tax concessions offered to SMSF’s.
A major advantage of establishing a SMSF is that you can take advantage of tax breaks when you borrow to buy an investment property and help grow your super for retirement. You can borrow up to 70% of the value of the property’s value to purchase an investment property. If you hold the property until after you retire and your super goes into the pension phase you pay no tax on either the capital gains if you sell or the rent if you hang on to your investment. Be careful if you design your investment to be negatively geared however – different rates apply.
First home buyers
Since July 1, 2017 in Victoria first home buyers don’t have to pay stamp duty.
Changes to the first-home buyer duty concession means that contracts entered from July 1, 2017 are exempt from paying stamp duty on homes with a value of less than $600,000. Homes with a dutiable value of $600,001 to $750,000 are eligible for a concessional rate of duty based on a sliding scale
From July 1, 2018 first-home buyers will be able to use up to $30,000 of voluntary superannuation contributions to place a deposit on a house or an apartment to help young people gain a foothold in the property market. This completes a loop of using your money wisely – contribute extra to your super fund and access relevant tax breaks (penalty-free) then use that money to buy your property.