October 10, 2025 • 20 mins
Ready to finally take control of your take control of your retirement savings and stop leaving your future in someone else’s hands? Book your free call with our team today to find out more: https://www.bcsmsf.com.au/contact-us/
In this episode of SMSF Insider, host Troy, founder of Blue Chip SMSF Services, discusses the advantages of buying property within a self-managed super fund (SMSF). He highlights the tax benefits, including no capital gains tax and no income tax during the pension phase. Troy emphasizes that many Australians are often unaware of where their superannuation is invested, noting that a majority prefer property investments over stocks due to their volatility. He provides insights into the complexities of SMSFs and offers general information, reminding listeners to consult with licensed advisors before making any investment decisions. Join Troy as he breaks down myths and empowers busy professionals to take charge of their financial independence.
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Please note: The information provided in this recording is for coaching and educational purposes only. It should not be considered personal financial advice. Everyone’s situation is different, so before acting on any of the content discussed, please seek independent financial advice tailored to your specific circumstances.
Timestamps:
00:00:00 - 00:00:00: Introduction
00:01:50 - Buying property with SMSF
00:06:10 - SMSF property investment benefits
00:09:24 - Buying property under SMSF
00:12:25 - SMSF property investment benefits
00:14:49 - Unrealized capital gains tax
00:17:46 - Tax benefits of property ownership
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Aussies are doing it tough right now, but we need to get our revenue up. So let's come up with some new taxes.
What do you got? It's so true. If you have a property in
your self-managed super fund, there's zero tax when you
When you hold the property all the way through to pension phase, obviously
(00:20):
So you're probably asking, why do people want to buy property under SMSF?
Well, that's because maybe they prefer property over stocks and they're more
Shares can be volatile and you really do need to understand shares
For the most part, I would say 90 plus percent of Australians, they
would actually have zero idea what this superannuation is
(00:44):
And he is right. Most clients that we talk to don't really
know where their funds are invested. Welcome to SMSF Insider,
where we help busy professionals to gain financial independence using
an SMSF. Hi, I'm Troy, founder of Blue Chip SMSF Services.
Now, over the last 20 years, I've helped thousands of Aussies manage the
complexities of self-managed super funds. And in this podcast, I'll
(01:06):
answer your questions, break down the myths, so you can take charge of your
financial freedom. Let's get into it. Hey guys, just a quick disclaimer and
just a reminder that this is not personal advice, so make
sure you speak with a licensed advisor before making any investment decision.
Welcome to this edition of SMSF Insider where I'll
be opening up some links to some social media content and
(01:29):
Buying a property in your self-managed super fund. Here's
what you need to know. Remember, this is not financial advice.
This is just generalized information and you should definitely
speak to a licensed professional. Now, my experience
using self-managed super funds to buy property is
that it can be extremely lucrative. For the most part,
(01:51):
I would say 90 plus percent of Australians, they would actually have
zero idea what their superannuation is actually
invested into. People know that it's in an industry fund, for
example, but they don't understand what that industry fund is investing in.
Yeah, so just briefly, Jack's talking
about, firstly, about purchasing property
(02:12):
through an SMSF and that it can be a lucrative
strategy, which it can be. We've been doing this strategy for well
over 10 years and we've got some clients who've done extremely well with
this strategy. He is right. We do have most
clients that we talk to don't really know
where their funds are invested. They know that it's with an
(02:34):
industry fund or Australian super or whatever the super account is,
but they really have no idea where the funds are invested. Is it
in a high growth fund? Is it in a growth fund? Is it conservative? Is it balanced? Is
it spread across? a multitude of different funds. Have
I updated my beneficiary details? It might even not even have their
current address details. So people are typically
(02:55):
a little bit out of touch when it comes to where their funds are invested.
And a lot of the time, they're not taking advantage of leverage. And
if done well on a long enough time horizon, using leverage to
your advantage when investing in property can be extremely lucrative, like it
Yep. I have to agree with him there. As I mentioned, we
have seen we have been doing this strategy or
(03:18):
clients have been doing this strategy, clients of ours for well over
10 years. And all of those clients have have done
So first things first, from my experience, the first thing that needs to be done before
buying a property inside of a self-managed super fund is
setting up the correct structure. Now, a good accountant and
financial planner will be able to assist you with this, but for compliance reasons,
(03:40):
there are certain structures that need to be set up in order for you then to
operate a self-managed super fund. Now, once the structures are
set up correctly, then it's about directing our
contributions into the super fund. Now to maximize what
Yeah, so when you are establishing a self-managed super fund, get
in touch with a professional and make sure that they've
(04:04):
got some experience in this space. So chat to either an
accountant or financial planner or an SMSF specialist
who does or has had some experience setting up SMSFs. He's
a bright young kid. I think he's, from what it seems, he's
done very well for himself. He's very knowledgeable and certainly
(04:24):
looks like he's got a lot of experience when it comes to purchasing
property. So I think he's a bright young kid and I think, yeah,
he's done quite well for himself, so good on him. Hey Chris, I'm looking at buying some property.
Yeah, good question. Lots of benefits really. There's the one where you've already got
usually a good deposit built up from all your contributions. It's quite easy to get
(04:45):
a loan in the super fund because you're borrowing money in the fund and therefore you've got the
equity there. The other thing too is that borrowing in the super fund really doesn't affect your
Chris is right. Yeah, most people do have
quite a bit of savings in their super fund, and it is quite a good strategy,
purchasing property through your fund with the ability
of leverage. As I mentioned previously, we have been doing this strategy for
(05:07):
well over a decade, or our clients have been, and
they have done extremely well over that period of time. But yes, certainly borrowing
through an SMSF to purchase property can be a good strategy.
And it is a good way if you have maxed out or you don't have
enough borrowing capacity or the bank won't lend you any more money outside of
(05:29):
super to purchase an investment property, then certainly having
exposure, using your SMSF can be a good way to,
if you're wanting exposure to the property market, using your
super, setting up an SMSF and purchasing property can
be a good way to get that exposure. Yeah, and also, you know, when
you are purchasing property, as Chris mentioned, when
(05:50):
you are purchasing property through your SMSF, it's
not going to affect your borrowing capacity outside of super. If you
are wanting to have further exposure to property, then
your borrowing through super doesn't affect that borrowing
capacity or your ability to borrow outside of
(06:10):
So good point by Chris. In your own name, buying the Superfund won't
cut across that loan, so it's actually a good separation there. Also, once you've got
your property in the Superfund, any income you make, any net income after expenses, is
only taxed at 15%, which is pretty good, and also any capital gain
down the track is 10%. It's a good way to strategise your real estate investments.
Very straightforward, good accountant, good planner, good broker, it's a piece of
(06:31):
Chris talking about the tax rate, certainly through an SMSF,
the tax rate is only 10% once you've held the property for
more than 12 months and the income is taxed at 15% as
opposed to your marginal tax rate when you're purchasing it outside of super. So
yeah, very good strategy and one that we've seen
And what's the gearing on self-managed super funds? 80% is achievable, 70% is normally
(06:54):
what they say, but it depends on what other assets you have in the super fund and the
Yeah, so I'm going to talk about gearing, saying what sort of deposit do you require for
an SMSF? Certainly anywhere from 20 to
30% is fairly typical, all the way up to 50%. Yeah, so
that's when Chris is talking about gearing there, he's talking about how
much should I borrow, whether that be 70% or 80%, which is fairly typical.
(07:18):
Most lenders will land up to 70 or 80%. So
It depends what other assets you've got in your super fund and the type of property. So all the normal things
So you borrow 70% or 80% of the purchase price when
He also mentioned in there about that 60, 70 or 80% is quite aggressive. But certainly, yeah, previously we have seen gearing as low as
(07:58):
But banks will land up to 80%. It really depends on
your individual circumstances. So do reach out to
and seek some advice around what gearing is going to be right for
you. But yeah, that strategy, certainly we've seen
Borrowing criterias for SMSF. There's a few different things.
There's only a number of lenders that can lend in SMSF and they
(08:20):
all have different rules and things as part of their policies. And
number one is majority of the lenders will allow you to lend up to 80% and
some of them are less, right? Depending on what type of asset you're buying, whether it's
Yes, so there are only a few lenders in the market when
you're talking about a limited recourse borrowing arrangement. There's only
(08:40):
a handful of lenders out there that do lend in this space, and
the gearing levels are up to about 80%. We
don't really see any clients or any banks, I
should say, lending more than 80%. Yes, certainly there are only
a few lenders in that limited recourse borrowing arrangement space.
Like for example, one bank with apartments will only take 65% as
(09:02):
an LVR, a loan to value ratio. But for the same asset, another
bank would take 80%. So it just depends. One lender will also
say that they need some money in cash or shares left
Yes. So every bank is different. They will have different lending
requirements. So speak to your broker about the
differences between lenders, and I'm sure they'll be able to point
(09:24):
So you're probably asking, why do people want to buy property under SMSF?
Well, that's because maybe they prefer property over stocks and they're more
comfortable in investing in properties rather than stocks because the
stock market is just too complicated these days. And they have more knowledge investing
It is a good point. Some people do feel more comfortable and do understand property
(09:44):
more than shares. And that may be because the asset class is tangible, you
can see it. And certainly, most Australians have had a positive experience
with property over the longer term. So shares can
be volatile and you really do need to understand shares
when you're investing in them and obviously property as well. But I
think the thing that spooks people about shares is they are, it
(10:05):
is quite a volatile asset class. Super high growth so it can shoot up
very quickly but can also come down very quickly. Property is
obviously a little bit more He's a little bit
more of a stable asset class, a little bit more defensive, and people
do tend to understand a bit more. I think that is why most
people do lean towards property over shares. I'm not
(10:27):
saying that one is better than the other. They're both just very different. Some
people do prefer shares, some prefer property. Everybody is
different. Reach out to your financial planner and they'll be able to help
because it's a lot easier for them to research in certain areas,
you know, vacancy rates, growth rates, what
infrastructure is in place, etc. And the second thing is they probably find
(10:49):
more value investing in property rather than stocks because the last
Yeah, so property prices have boomed in the last few years and it
doesn't look like it's slowing down anytime soon. That's purely, I
think, because of the supply demand. There is far
less supply than what there is demand. But it's
not property isn't the right, the silver bullet that
(11:13):
is going to fix everyone's investment solutions. Everyone is
very different. So yeah, reach out and seek some
advice and some guidance before making investment decisions. Just quickly guys,
if you're a busy professional fed up with traditional super funds and overwhelmed
by the setup of your SMSF, we can help. Book in a call with my
team using the link in the show notes and let's build your future
(11:36):
Because people don't realize it but as long as you've got property in your name
and hold on to that property for the rest of your life, you'll be taxed. However,
if you have a property in your self-managed super fund, there's
zero tax when you retire. 15% while you work but
Yeah, so this gentleman's talking about taxation of
(11:56):
property inside of super. Certainly when you hold the
property all the way through to pension phase, there is
no, obviously no capital gains tax, but there's also
no tax on the income. So the rent that property is distributing on
a monthly or weekly basis is all tax free versus
property when you're purchasing in your own name, if you're holding that all the way through to to
(12:20):
retirement age in your personal name, all of that income will
Even the SMSF strategy video, which for me is the most powerful video in that
entire course, how I build my SMSF and how I build my
client's SMSF. For me, it's like one of the most powerful things any Australian
could go out there and do in their portfolio. If you follow that game plan,
that guideline, in my opinion, like anyone can create serious
(12:44):
Certainly purchasing property through Super can be
a great strategy. You will need some guidance around firstly
setting up the fund and also some guidance around
which property to purchase and which property is going to be most
suitable for your fund. So yeah, reach
(13:05):
Labor's new super tax, it's not about taxing the rich, it's
about screwing the rest of us. And I'm going to break it down for you. Labor is introducing
a tax on super balances over $3 million. Right now, about
Yeah, so what this guy's talking about is the $3 million unrealized
capital gains tax, which is looking like it will
be passed through the Senate, which means every super
(13:28):
fund that has a balance more than $3 million will be
taxed an additional 15%, so it'll be taxed at
30% for amounts over $3 million. There is a calculation to
use if this is going to affect you. It only affects
a small portion of the population at the moment, but there is a calculation if
(13:48):
you want some information on that. We do have an
episode that breaks all that down, so you can scroll back and you'll see
how that is actually calculated. But what this gentleman
So over time, more and more Aussies will get dragged into it.
Housing? What he's talking about here is the $3 million threshold
(14:11):
that is currently being proposed is not indexed. So
it means that over time, it'll start to capture
more and more people. So it might not capture it at the moment. It'll
only capture a small percentage of the population. But as time goes on, obviously,
it'll slowly start to capture more. Of course, governments
can introduce indexation on the cap, and
(14:33):
that may happen over time, but certainly the
incentive will be to raise more
revenue and not to raise less revenue. So I can't see
the cap coming down. Certainly it'll be going
That's up over 30%. Housing, in some areas, up over
(14:53):
40%. Groceries, still climbing. And our dollar, getting printed into oblivion
by an incompetent government with soaring debt levels. So yeah,
$3 million might sound big right now, but in 5-10 years with
Yeah, so he's right. We do have, there
is certainly, there are some inflationary issues
(15:15):
domestically here in Australia, as well as globally, that obviously
central banks are trying to fix with raising rates. But certainly
over time, $3 million won't be a lot. And if
you're a retiree at the moment with $3 million in
super, and you require age, full-time
age care, it's not hard to rip through 150K
(15:39):
a year in full-time care. And there
is quite a percentage once you get over, of Australians over
that 80 years of age, there are a higher
percentage that do require full-time care, and $3 million
might be generating $150,000 a year, but full-time aged
care is expensive and can certainly far
(16:01):
exceed $150,000 a year, which is which
is an estimate on roughly how much a $3 million portfolio will
generate in income. But certainly as time goes on and
Australians get more and more and become older, they
will require, some of them will require full-time
care. And it is, as I said, it is quite
(16:22):
expensive. So it might seem, $3 million might seem like
a lot at the moment, but in five, 10 years' time, $3 million
Aussies are doing it tough right now, but we need to get our revenue up. So let's come up with some new
taxes. What do you got? How about we raise income tax? Nah, leave that. It's already at
45%. They're practically working for free. How about any time they invest their money into
an asset, we tax them on half when they sell? Yeah, we already do that. It's called capital gains tax.
(16:48):
What about money they make in a business? Company tax, already got that. What about when they pay their
employees? Can we sting them there? That's payroll tax and we've been stinging them since 2007. What if
their boss gives them perks like a company car? Yeah, fringe benefits tax, already getting that.
Come on, think. What about petrol? They can't drive without it. Yeah, fuel excise tax.
Every litre. What about super? Do we tax their retirement savings? That's super tax. We
tax that coming in, we tax it coming out. We've got that covered. Alright, hear me out. How
(17:10):
about we raise GST to 15%? Now we're talking. I'll write that down, we'll
I just want to buy a nice car. Can we get some of that? LCT, baby, luxury car
Council rates. Every bloody quarter. More toll roads. Yeah, we're milking tolls. Alcohol and
Yeah. Yeah, I do love these guys. We
(17:34):
do get taxed a lot here in Australia. We are one of the most highly
Hey Jack, are people earning over $190,000 stupid if they
Yes, absolutely they're stupid because the reality
is your $190,000 probably goes down to like $120,000 net, which
means you're losing $70,000 to the
(17:58):
Yeah, so Jack's talking about the taxation
benefits of owning property. If you're on
a higher tax bracket and you're earning $190,000 a year, you're obviously paying
about $70,000 in tax. Then when you do own assets
like property in your own name, you can get some tax benefits
from doing that. But certainly reach
(18:20):
out to your advisor or financial planner before
and then with the $120,000 that you've got left over, you then got to
go live and it's people like you, Katie, they have to go to Europe
and they've got to go buy all these expensive things. So by the time you're
actually negative at the end of the year, you've just got a credit card that's got a debt on it, which
you don't want. So what you should do, you should go buy investment properties and
(18:43):
you get this beautiful thing called negative gearing and depreciation, which means the $70,000 of tax
Yeah, so Jack's talking about here negative gearing depreciation, which
is any property will have,
certainly the newer properties will have a depreciation. So
you'll be able to claim some tax back on or
(19:05):
get some depreciation on newer properties as opposed to the older ones, and negative gearing.
So if the property is costing you more than it's making,
then you can claim that negative
component, and that's called negative gearing. If you are a high income earner and you've got
the ability to negative gear and purchase these assets
to get some tax breaks, then certainly Certainly,
(19:29):
you should talk to your advisor about doing that. But the
cost of living these days, I mean, some people are,
as Jack's mentioned here, paying $70,000 in tax. They're
netting $120,000. And then they've got to pay things like school fees and
mortgages. And cost of living is forever going up. So yeah,
(19:50):
I think the strategy, yeah, it's a good strategy. But certainly, you
want to get some advice before jumping in. Thanks for tuning in to
this episode of SMSF Insider. If you got value from this, make
sure you subscribe so you never miss the strategies we share to
help you take control of your financial future. Find us on socials at bluechipSMSF
Aussies are doing it tough right now, but we need to get our revenue up. So let's come up with some new taxes.
What do you got? It's so true. If you have a property in
your self-managed super fund, there's zero tax when you
When you hold the property all the way through to pension phase, obviously
(00:20):
So you're probably asking, why do people want to buy property under SMSF?
Well, that's because maybe they prefer property over stocks and they're more
Shares can be volatile and you really do need to understand shares
For the most part, I would say 90 plus percent of Australians, they
would actually have zero idea what this superannuation is
(00:44):
And he is right. Most clients that we talk to don't really
know where their funds are invested. Welcome to SMSF Insider,
where we help busy professionals to gain financial independence using
an SMSF. Hi, I'm Troy, founder of Blue Chip SMSF Services.
Now, over the last 20 years, I've helped thousands of Aussies manage the
complexities of self-managed super funds. And in this podcast, I'll
(01:06):
answer your questions, break down the myths, so you can take charge of your
financial freedom. Let's get into it. Hey guys, just a quick disclaimer and
just a reminder that this is not personal advice, so make
sure you speak with a licensed advisor before making any investment decision.
Welcome to this edition of SMSF Insider where I'll
be opening up some links to some social media content and
(01:29):
Buying a property in your self-managed super fund. Here's
what you need to know. Remember, this is not financial advice.
This is just generalized information and you should definitely
speak to a licensed professional. Now, my experience
using self-managed super funds to buy property is
that it can be extremely lucrative. For the most part,
(01:51):
I would say 90 plus percent of Australians, they would actually have
zero idea what their superannuation is actually
invested into. People know that it's in an industry fund, for
example, but they don't understand what that industry fund is investing in.
Yeah, so just briefly, Jack's talking
about, firstly, about purchasing property
(02:12):
through an SMSF and that it can be a lucrative
strategy, which it can be. We've been doing this strategy for well
over 10 years and we've got some clients who've done extremely well with
this strategy. He is right. We do have most
clients that we talk to don't really know
where their funds are invested. They know that it's with an
(02:34):
industry fund or Australian super or whatever the super account is,
but they really have no idea where the funds are invested. Is it
in a high growth fund? Is it in a growth fund? Is it conservative? Is it balanced? Is
it spread across? a multitude of different funds. Have
I updated my beneficiary details? It might even not even have their
current address details. So people are typically
(02:55):
a little bit out of touch when it comes to where their funds are invested.
And a lot of the time, they're not taking advantage of leverage. And
if done well on a long enough time horizon, using leverage to
your advantage when investing in property can be extremely lucrative, like it
Yep. I have to agree with him there. As I mentioned, we
have seen we have been doing this strategy or
(03:18):
clients have been doing this strategy, clients of ours for well over
10 years. And all of those clients have have done
So first things first, from my experience, the first thing that needs to be done before
buying a property inside of a self-managed super fund is
setting up the correct structure. Now, a good accountant and
financial planner will be able to assist you with this, but for compliance reasons,
(03:40):
there are certain structures that need to be set up in order for you then to
operate a self-managed super fund. Now, once the structures are
set up correctly, then it's about directing our
contributions into the super fund. Now to maximize what
Yeah, so when you are establishing a self-managed super fund, get
in touch with a professional and make sure that they've
(04:04):
got some experience in this space. So chat to either an
accountant or financial planner or an SMSF specialist
who does or has had some experience setting up SMSFs. He's
a bright young kid. I think he's, from what it seems, he's
done very well for himself. He's very knowledgeable and certainly
(04:24):
looks like he's got a lot of experience when it comes to purchasing
property. So I think he's a bright young kid and I think, yeah,
he's done quite well for himself, so good on him. Hey Chris, I'm looking at buying some property.
Yeah, good question. Lots of benefits really. There's the one where you've already got
usually a good deposit built up from all your contributions. It's quite easy to get
(04:45):
a loan in the super fund because you're borrowing money in the fund and therefore you've got the
equity there. The other thing too is that borrowing in the super fund really doesn't affect your
Chris is right. Yeah, most people do have
quite a bit of savings in their super fund, and it is quite a good strategy,
purchasing property through your fund with the ability
of leverage. As I mentioned previously, we have been doing this strategy for
(05:07):
well over a decade, or our clients have been, and
they have done extremely well over that period of time. But yes, certainly borrowing
through an SMSF to purchase property can be a good strategy.
And it is a good way if you have maxed out or you don't have
enough borrowing capacity or the bank won't lend you any more money outside of
(05:29):
super to purchase an investment property, then certainly having
exposure, using your SMSF can be a good way to,
if you're wanting exposure to the property market, using your
super, setting up an SMSF and purchasing property can
be a good way to get that exposure. Yeah, and also, you know, when
you are purchasing property, as Chris mentioned, when
(05:50):
you are purchasing property through your SMSF, it's
not going to affect your borrowing capacity outside of super. If you
are wanting to have further exposure to property, then
your borrowing through super doesn't affect that borrowing
capacity or your ability to borrow outside of
(06:10):
So good point by Chris. In your own name, buying the Superfund won't
cut across that loan, so it's actually a good separation there. Also, once you've got
your property in the Superfund, any income you make, any net income after expenses, is
only taxed at 15%, which is pretty good, and also any capital gain
down the track is 10%. It's a good way to strategise your real estate investments.
Very straightforward, good accountant, good planner, good broker, it's a piece of
(06:31):
Chris talking about the tax rate, certainly through an SMSF,
the tax rate is only 10% once you've held the property for
more than 12 months and the income is taxed at 15% as
opposed to your marginal tax rate when you're purchasing it outside of super. So
yeah, very good strategy and one that we've seen
And what's the gearing on self-managed super funds? 80% is achievable, 70% is normally
(06:54):
what they say, but it depends on what other assets you have in the super fund and the
Yeah, so I'm going to talk about gearing, saying what sort of deposit do you require for
an SMSF? Certainly anywhere from 20 to
30% is fairly typical, all the way up to 50%. Yeah, so
that's when Chris is talking about gearing there, he's talking about how
much should I borrow, whether that be 70% or 80%, which is fairly typical.
(07:18):
Most lenders will land up to 70 or 80%. So
It depends what other assets you've got in your super fund and the type of property. So all the normal things
So you borrow 70% or 80% of the purchase price when
He also mentioned in there about that 60, 70 or 80% is quite aggressive. But certainly, yeah, previously we have seen gearing as low as
(07:58):
But banks will land up to 80%. It really depends on
your individual circumstances. So do reach out to
and seek some advice around what gearing is going to be right for
you. But yeah, that strategy, certainly we've seen
Borrowing criterias for SMSF. There's a few different things.
There's only a number of lenders that can lend in SMSF and they
(08:20):
all have different rules and things as part of their policies. And
number one is majority of the lenders will allow you to lend up to 80% and
some of them are less, right? Depending on what type of asset you're buying, whether it's
Yes, so there are only a few lenders in the market when
you're talking about a limited recourse borrowing arrangement. There's only
(08:40):
a handful of lenders out there that do lend in this space, and
the gearing levels are up to about 80%. We
don't really see any clients or any banks, I
should say, lending more than 80%. Yes, certainly there are only
a few lenders in that limited recourse borrowing arrangement space.
Like for example, one bank with apartments will only take 65% as
(09:02):
an LVR, a loan to value ratio. But for the same asset, another
bank would take 80%. So it just depends. One lender will also
say that they need some money in cash or shares left
Yes. So every bank is different. They will have different lending
requirements. So speak to your broker about the
differences between lenders, and I'm sure they'll be able to point
(09:24):
So you're probably asking, why do people want to buy property under SMSF?
Well, that's because maybe they prefer property over stocks and they're more
comfortable in investing in properties rather than stocks because the
stock market is just too complicated these days. And they have more knowledge investing
It is a good point. Some people do feel more comfortable and do understand property
(09:44):
more than shares. And that may be because the asset class is tangible, you
can see it. And certainly, most Australians have had a positive experience
with property over the longer term. So shares can
be volatile and you really do need to understand shares
when you're investing in them and obviously property as well. But I
think the thing that spooks people about shares is they are, it
(10:05):
is quite a volatile asset class. Super high growth so it can shoot up
very quickly but can also come down very quickly. Property is
obviously a little bit more He's a little bit
more of a stable asset class, a little bit more defensive, and people
do tend to understand a bit more. I think that is why most
people do lean towards property over shares. I'm not
(10:27):
saying that one is better than the other. They're both just very different. Some
people do prefer shares, some prefer property. Everybody is
different. Reach out to your financial planner and they'll be able to help
because it's a lot easier for them to research in certain areas,
you know, vacancy rates, growth rates, what
infrastructure is in place, etc. And the second thing is they probably find
(10:49):
more value investing in property rather than stocks because the last
Yeah, so property prices have boomed in the last few years and it
doesn't look like it's slowing down anytime soon. That's purely, I
think, because of the supply demand. There is far
less supply than what there is demand. But it's
not property isn't the right, the silver bullet that
(11:13):
is going to fix everyone's investment solutions. Everyone is
very different. So yeah, reach out and seek some
advice and some guidance before making investment decisions. Just quickly guys,
if you're a busy professional fed up with traditional super funds and overwhelmed
by the setup of your SMSF, we can help. Book in a call with my
team using the link in the show notes and let's build your future
(11:36):
Because people don't realize it but as long as you've got property in your name
and hold on to that property for the rest of your life, you'll be taxed. However,
if you have a property in your self-managed super fund, there's
zero tax when you retire. 15% while you work but
Yeah, so this gentleman's talking about taxation of
(11:56):
property inside of super. Certainly when you hold the
property all the way through to pension phase, there is
no, obviously no capital gains tax, but there's also
no tax on the income. So the rent that property is distributing on
a monthly or weekly basis is all tax free versus
property when you're purchasing in your own name, if you're holding that all the way through to to
(12:20):
retirement age in your personal name, all of that income will
Even the SMSF strategy video, which for me is the most powerful video in that
entire course, how I build my SMSF and how I build my
client's SMSF. For me, it's like one of the most powerful things any Australian
could go out there and do in their portfolio. If you follow that game plan,
that guideline, in my opinion, like anyone can create serious
(12:44):
Certainly purchasing property through Super can be
a great strategy. You will need some guidance around firstly
setting up the fund and also some guidance around
which property to purchase and which property is going to be most
suitable for your fund. So yeah, reach
(13:05):
Labor's new super tax, it's not about taxing the rich, it's
about screwing the rest of us. And I'm going to break it down for you. Labor is introducing
a tax on super balances over $3 million. Right now, about
Yeah, so what this guy's talking about is the $3 million unrealized
capital gains tax, which is looking like it will
be passed through the Senate, which means every super
(13:28):
fund that has a balance more than $3 million will be
taxed an additional 15%, so it'll be taxed at
30% for amounts over $3 million. There is a calculation to
use if this is going to affect you. It only affects
a small portion of the population at the moment, but there is a calculation if
(13:48):
you want some information on that. We do have an
episode that breaks all that down, so you can scroll back and you'll see
how that is actually calculated. But what this gentleman
So over time, more and more Aussies will get dragged into it.
Housing? What he's talking about here is the $3 million threshold
(14:11):
that is currently being proposed is not indexed. So
it means that over time, it'll start to capture
more and more people. So it might not capture it at the moment. It'll
only capture a small percentage of the population. But as time goes on, obviously,
it'll slowly start to capture more. Of course, governments
can introduce indexation on the cap, and
(14:33):
that may happen over time, but certainly the
incentive will be to raise more
revenue and not to raise less revenue. So I can't see
the cap coming down. Certainly it'll be going
That's up over 30%. Housing, in some areas, up over
(14:53):
40%. Groceries, still climbing. And our dollar, getting printed into oblivion
by an incompetent government with soaring debt levels. So yeah,
$3 million might sound big right now, but in 5-10 years with
Yeah, so he's right. We do have, there
is certainly, there are some inflationary issues
(15:15):
domestically here in Australia, as well as globally, that obviously
central banks are trying to fix with raising rates. But certainly
over time, $3 million won't be a lot. And if
you're a retiree at the moment with $3 million in
super, and you require age, full-time
age care, it's not hard to rip through 150K
(15:39):
a year in full-time care. And there
is quite a percentage once you get over, of Australians over
that 80 years of age, there are a higher
percentage that do require full-time care, and $3 million
might be generating $150,000 a year, but full-time aged
care is expensive and can certainly far
(16:01):
exceed $150,000 a year, which is which
is an estimate on roughly how much a $3 million portfolio will
generate in income. But certainly as time goes on and
Australians get more and more and become older, they
will require, some of them will require full-time
care. And it is, as I said, it is quite
(16:22):
expensive. So it might seem, $3 million might seem like
a lot at the moment, but in five, 10 years' time, $3 million
Aussies are doing it tough right now, but we need to get our revenue up. So let's come up with some new
taxes. What do you got? How about we raise income tax? Nah, leave that. It's already at
45%. They're practically working for free. How about any time they invest their money into
an asset, we tax them on half when they sell? Yeah, we already do that. It's called capital gains tax.
(16:48):
What about money they make in a business? Company tax, already got that. What about when they pay their
employees? Can we sting them there? That's payroll tax and we've been stinging them since 2007. What if
their boss gives them perks like a company car? Yeah, fringe benefits tax, already getting that.
Come on, think. What about petrol? They can't drive without it. Yeah, fuel excise tax.
Every litre. What about super? Do we tax their retirement savings? That's super tax. We
tax that coming in, we tax it coming out. We've got that covered. Alright, hear me out. How
(17:10):
about we raise GST to 15%? Now we're talking. I'll write that down, we'll
I just want to buy a nice car. Can we get some of that? LCT, baby, luxury car
Council rates. Every bloody quarter. More toll roads. Yeah, we're milking tolls. Alcohol and
Yeah. Yeah, I do love these guys. We
(17:34):
do get taxed a lot here in Australia. We are one of the most highly
Hey Jack, are people earning over $190,000 stupid if they
Yes, absolutely they're stupid because the reality
is your $190,000 probably goes down to like $120,000 net, which
means you're losing $70,000 to the
(17:58):
Yeah, so Jack's talking about the taxation
benefits of owning property. If you're on
a higher tax bracket and you're earning $190,000 a year, you're obviously paying
about $70,000 in tax. Then when you do own assets
like property in your own name, you can get some tax benefits
from doing that. But certainly reach
(18:20):
out to your advisor or financial planner before
and then with the $120,000 that you've got left over, you then got to
go live and it's people like you, Katie, they have to go to Europe
and they've got to go buy all these expensive things. So by the time you're
actually negative at the end of the year, you've just got a credit card that's got a debt on it, which
you don't want. So what you should do, you should go buy investment properties and
(18:43):
you get this beautiful thing called negative gearing and depreciation, which means the $70,000 of tax
Yeah, so Jack's talking about here negative gearing depreciation, which
is any property will have,
certainly the newer properties will have a depreciation. So
you'll be able to claim some tax back on or
(19:05):
get some depreciation on newer properties as opposed to the older ones, and negative gearing.
So if the property is costing you more than it's making,
then you can claim that negative
component, and that's called negative gearing. If you are a high income earner and you've got
the ability to negative gear and purchase these assets
to get some tax breaks, then certainly Certainly,
(19:29):
you should talk to your advisor about doing that. But the
cost of living these days, I mean, some people are,
as Jack's mentioned here, paying $70,000 in tax. They're
netting $120,000. And then they've got to pay things like school fees and
mortgages. And cost of living is forever going up. So yeah,
(19:50):
I think the strategy, yeah, it's a good strategy. But certainly, you
want to get some advice before jumping in. Thanks for tuning in to
this episode of SMSF Insider. If you got value from this, make
sure you subscribe so you never miss the strategies we share to
help you take control of your financial future. Find us on socials at bluechipSMSF
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