I am a retiree who has an SMSF and I draw a pension from the fund I just sold an investment property that will net me about $450,000 after expenses. Where should I invest this amount? I already have around $860,000 in share portfolio and $300,000 in term deposits.
Assuming you’re under 75, be sure to deduct up to $27,500 in super to reduce capital gains tax on the property sold.
When it comes to investing in retirement, super is often a safer bet.Credits:Louis Duvis
Super is also eligible for tax benefits, so you can make a non-concessional contribution of $110,000 in 2022-23 and, after 1 July, ‘bring forward’ a further amount of $312,500, taking the total to $450,000, always assuming you meet your personal transfer balance. Under the cap.
Your pension fund is tax-free, as your pension is in your hands. You can always withdraw money later if needed elsewhere.
I’m in my late 40s, single, and working full-time in two homes in NSW. The first, mortgage-free, was in Sydney which I bought in 2008 and lived there for 13 years. The second is in Blue Mountain, which I bought in 2021 and moved into while renting a house in Sydney. This second house is a dual occupancy and I rent out most of it. I thought I’d keep the house in Sydney as long as I could, but now I think it’s wise to sell it as I’m subject to land tax as both my houses generate income. From what I understand, if I sell the house in Sydney within six years I can designate it as my main residence and get the full CGT exemption. However, for land tax, I need to select Blue Mountain House as my main residence to get partial land tax exemption. Am I still entitled to the full exemption if I sell my house in Sydney within six years from the date of letting, even if Revenue NSW considers my house in the hills to be my main residence?
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Interesting question. Capital Gains Tax, or CGT, is based on federal law while Revenue NSW applies state law.
Under the CGT rules, you can claim a home as your main residence for up to six years after moving out, unless you claim another home to be exempt from CGT. This is not affected by any of your decisions regarding land tax.
Under NSW land tax rules, if you rent out part of your home, you can still claim land tax relief as long as the leased part of your property is a flat or room or both. If you rent out a large part of your home, you can get the mentioned partial exemption.
