In this episode of The Property Nerds, co-hosts Arjun Paliwal and Adrian Lee from InvestorKit and Jack Fouracre from Fouracre Financial are joined by Ronesh Hargovind from the Incentum Group to discuss how understanding equity loans and trusts can shape successful property investment strategies.
Self-managed super funds (SMSFs) have become an increasingly popular vehicle for Australians looking to grow their retirement savings through property, though they come with a level of complexity that requires careful planning.
Hargovind explains that SMSFs have gained traction over the past 15 years as a way to leverage tax advantages and build wealth, but managing them properly requires distinguishing between personal and fund-related expenses.
He suggests starting an SMSF with a balance of $200,000 to $300,000 to cover set-up and compliance costs, noting that while smaller or larger balances are possible, they bring different considerations.
One of the key benefits is favourable tax treatment, with contributions and gains taxed at low rates during accumulation and tax-free benefits during the pension phase.
However, trustees must be vigilant about record keeping and compliance to avoid penalties from the Australian Taxation Office, and ongoing discussions about unrealised capital gains tax add further complexity for large funds.