Consider using your Self-Managed Super Fund (SMSF) for Investing in Property
We get approached by many clients looking to invest in property to grow their wealth for their retirement. In Australia, property is one of the safest investment assets and many people have established a nice retirement nest egg using just that.
The thing with investing in property is that it requires a large upfront capital outlay and not many of us have that much spare cash just laying around. So where does one find enough money to get started? One place to look is your superannuation balance. If you have sufficient balance in your superfund you could use that to buy property.
How to start investing in property using your Self-Managed Super Fund (SMSF)?
If you have your money in a retail or industry superfund, then you can use that money to buy property. Doing it this way you can only buy property to the value of the balance you have in your super. For example, if your balance is $200k you can buy property up to the value of $200k. If you want to buy a property for more than that, and let’s face it there is not much for that money in Sydney that’s for sure, you would need to borrow more money and you cannot really borrow in a retail or industry superfund. This is where self-managed super funds (SMSF) come in. SMSF is the only investment vehicle that will allow you to borrow to invest, hence you will need to setup your own SMSF and rollover your funds from the retail fund to get started. This also comes with some major benefits.
Key benefits of investing in property using my Self-Managed Super Fund (SMSF)
Major benefit of SMSF is the discounted tax rate in comparison to your individual tax rate. SMSFs have 15% tax rate which means any income it earns goes much longer than it would in your personal name. Any capital gains also come with a 33.33% discount hence you only pay a flat 10% tax rate when selling an asset. The best benefit of all comes in retirement as any assets up to the cap of $1.6mil can then be transferred into your pension account within your SMSF. Any assets in the pension account at that point become tax free. Any income those properties make, such as rent or any capital gains on that property you sell become tax free. Tax Free? So why isn’t everyone doing it you might ask? Well there are some considerations.
Key considerations when starting an SMSF
Key thing to consider is your current balance. Your balance should ideally be at or around $200k and the absolute minimum should definitely be no lower than $150k. Your current employer contributions need to be flowing into your superfund on a regular basis as they will dictate how much you can borrow. The fees of maintaining your fund should also be considered and based on ASIC research at $200k balance most SMSFs become more cost effective to run than retail funds. Although if you get the right SMSF accountant then you can achieve this effectiveness at lower amounts as well.
Other consideration is the responsibility. You need to make sure you invest your money once it is in SMSF. Quiet often people go ahead with their SMSF then just leave their money sitting there without taking the next step and investing it into property or whatever else they initially wanted to invest in. So only do this if you are intending on going all the way. This is also something you can outsource to a third party and your SMSF accountant can help you with that.
Similarly, there is also some paperwork that must be kept and this itself can be outsourced to your SMSF accountant so it becomes less daunting.
For more information or to talk to one of our expert, friendly advisers about your SMSF options, please contact us below or call us on 1800 979 888. We’re always happy to help.
Are you looking for XERO Accountants?
At Key Business Accountants all our accountants specialise in XERO accounting systems. As XERO accountants we can help set the system up to suit your business needs. XERO will allow you to perform most of your processes at a fraction of time they currently take allowing you to save time doing non value add work and focus more on running your day to day business. We’ll cover key benefits XERO can bring to your business:
Automated bank feeds, streamlined bank reconciliations, automated invoicing, automated reminders to help collections and improve cash flow, professional reporting and mobile app are some of the benefits your business can gain by switching to XERO. If setup properly it can save you days of labour trying to stay on top of your books. Why not spend that time running your business instead.
Gone are the days when you had to run a terminal server to host all your software on there to service your business. You had to have a dedicated IT person to help set it all up. You had to do manual backups and heaven forbid you ever had to recover from a power surge. Now days we have the cloud allowing our software to run on enterprise grade servers with multi server backups that have uninterrupted power supplies to make sure they are always running. This is the stuff only multinational companies had access to in the past and now it is available to YOU, a small business owner, at a fraction of the cost. XERO software runs in the cloud and all those upgrades that used to take your business offline for days on end now happen automatically. All the backups now happen automatically without you having to ever lift a finger. And it uses the bank grade security to keep your data safe.
With the software in the cloud you can now have multiple users accessing it at the same time from multiple locations. This allows you to operate your business from multiple locations and also allows us, your XERO accountants, to be able to access your data whenever you need help or are not sure how to process a specific transaction. This is true collaboration. And how many thousands do I need to spend to get all this you ask? Well the entire a software package is available to you at a small monthly premium.
If you want to know more call us on 1800 979 888. Key Business Accountants your trusted XERO Accountants.
We love property and have a wide range of clients in the property and real estate industry, from developers to real estate agents and everything in between.
We do a lot of work with a range of businesses servicing the property industry including:
- Real Estate Agents
- Developers (both small and large)
- Buyers agents
We get approached by many clients looking to invest in property to grow their wealth for their retirement. In Australia, property is one of the safest investment assets and many people have established a nice retirement nest egg using just that.
We can help you with your next (or first!) property investment, including advising and assisting with buying property, reviewing your property portfolio, advising on correct structuring to minimise tax and protect your assets.
We have lots of experience in the Property Industry and while many Accountants struggle with some of the unique issues in the Industry Margin Schemes, Capital Gains Tax, Real Estate Trust Accounts and Asset Protection are all common areas for us and issues we deal with on a regular basis.
We also have extensive experience in building finance proposals for the banks and other lenders. If you are in the property industry please book an appointment today and experience the Key Business Accountants difference.
Contact us below or call the office now on 1800 979 888 for an appointment with one of our experienced Accountants.
We are specialist advisers to Dentists, particularly Dentists working as subcontractors and those wanting to establish their own business for the first time.
We have assisted Sub contract dentists cut thousands from their tax bill, set up record keeping systems that are simple and easy to use and deal with PSI problems. We have also helped many dentists make the move to owning and running their own practice either on their own or in partnership. We assist clients in a range of business areas and set up new businesses almost every day and can help you too.
Call the office on 1800 979 888 and ask for an appointment with one of our accountants.
We love import and wholesale businesses. Import duties, freight and logistics, pricing your stock accurately and sales/distribution channels are issues we deal with on a daily basis for clients.
We have a range of clients in this area, many import (to some degree) from one or multiple countries. Import duties, converting from foreign currencies and freight issues are all things we deal with on a regular basis. We can also assist with your pricing and logistics strategies, generally this is a business where your internal accounting systems must be very good to ensure you are tracking and pricing you stock accurately, we can assist with setting up an internal accounting and stock tracking system or review your existing system and our staff have worked across a broad range of systems.
Call the office for an appointment today.
Are you an IT consultant? Management Consultant? Most “consultants” or contractors face similar issues, PSI, keeping your records in as simple a method as possible, etc. We have a large number of clients who fall in the general classification of consultant and can help you. As we handle many clients in this area we are familiar with the issues you face including the area of PSI (personal services income). Other issues we find are common to this area are:
- Record keeping, you want a system that is as simple as possible
- Home office expenses, you want to maximise this area of deductions in many cases
- Superannuation, if you are not paying yourself super then you are going to be at a disadvantage over someone who works as an employee
- Business structuring, should you be operating as a sole trader or a company? (or some other structure)
Call the office today to discuss your needs in more detail.
We are specialist Accountants and Advisers to the Veterinary Industry, our services go well beyond the normal once a year returns and meeting.
We can assist you in a wide range of areas from expanding your current operations, opening a second clinic or increasing your profit levels in your existing clinic.
We work in a much more hands on way going well beyond the normal annual Accounting work if required. We can assist you and your business in a range of areas such as:
- Implementing change programs
- Pricing and controlling stock,
- Analysing you staffing levels
- Setting your pricing. and pricing strategies
- Buying your first Practice or expanding existing operations
We can also assist with financial strategies to ensure you are building your wealth as well as your business. For a confidential discussion of your needs please contact our office today.
At Key Business Accountant we have a range of services tailored specifically for tradespeople; we can take care of your books, do your BAS, your Invoicing or handle POs, COCs and other paperwork. Over half our clients are tradespeople ranging from developers with 10-20 staff right through to one man subcontractors, with our heavy focus on bookkeeping, record keeping systems installation and associated training we can offer end to end record keeping (invoicing, recording and paying bills, order management) through to the typical once a year tax and compliance work.
If you are tired of doing the books after a long day or driving the wife crazy getting her to do them we can help, give us some or all of your record keeping work and focus on what you do best! We are also well positioned to provide business coaching and expansion advice to these industries, having assisted multiple businesses, across all the trades, go from one man and a Ute to two three and four team businesses and beyond. Our current client list includes; Builders, Carpenters, plumbers, air conditioning mechanics, electricians, home maintenance and small jobs, civil contracting and earthmoving and many more.
We service most suburbs of Sydney so give us a call on 1800 979 888 today to discuss your needs in more detail.
Family Day Care Advice from your friendly local Family Day Care Accountant
Family daycare business is as challenging as any other business. FDC makes it even harder when you are trying to look after kids and managing books for the business without professional assistance. As a leading firm in providing specialised accounting services to Family Day Care educators across Australia, we understand your accounting needs very well because we keep ourselves up to date with latest changes to government policies and taxation law.
We receive lots of queries about what educators can and can’t claim for their Family DayCare business. There is no straight forward answer to this as it totally depends on educators individual circumstances. As a specialised Family day care accountant, we can guide you through every step from setting up your business, how to keep good records and at the end of financial year lodging your tax returns. Following are some areas where most educators make mistake in their record keeping.
Home based business expenses: Make sure you are claiming the right percentage of your running expenses. If you are renting you may be entitled to claim part of your rent for the area you exclusively use for Family Day Care Business. If you running a business from your own home and that is your primary residence as well, be aware about future CGT implications if you claim Council rates, Mortgage interest and sewerage costs.
Motor vehicle: You can generally claim running expenses such as fuel, repair and registration. If you are using your car for business and privately, then you must apportion the business use and private use. We recommend you complete logbook for twelve continuous weeks so at the end of year we know how much you can claim. But if you use your motor vehicle exclusively for business you may be able to claim 100% (Substantiation required).
Repairs and Improvements: If you repaired some area of your house that was damaged exclusively related to family day care business then you are entitled to claim full amount. But if you have done major improvement ((e.g. adding room, huge renovation etc.) to your house then you may not be able to claim the full amount.
We at Key Business Accountants understand this industry very well. If you have any question please feel free to contact our Family DayCare Accountant on 1800 979 888 to make an obligation free appointment.
Self managed super funds give you better control over organising your retirement funds to yield maximum benefit. They are managed by you as the trustee allowing you to control where you invest your retirement funds.
Benefits of SMSF
- The main advantage of owning a self-managed super fund or SMSF is the control to invest in a broad selection of assets such as direct shares, high yielding cash accounts and property investments. SMSFs can borrow money from a bank to make investments however there are specific rules that the fund needs to follow while borrowing. This sort of borrowing is also known as limited recourse borrowing, and with this type of loan you will be able to purchase an asset such as an investment property. It does mean however that you are buying an asset of much greater value than you have available in your fund getting capital growth at a much higher rate.
- If you are a business owner, you can make use of SMSF’s to invest in purchasing business property and then rent back that property for commercial purposes to your business. Since SMSF can borrow, the limited recourse borrowing can be used to obtain a business property. In short this lets you own your business real property in the superannuation fund, supporting funding and cash flow in your own businesses.
- Super funds in general present you with the advantage to cut down income tax on investment income and capital gains. All superannuation earnings are taxed at only 15% and all capital gains your fund makes are taxed at a flat 10%. In pension phase this tax goes down to 0%. That’s right no tax at all. Compare that with the tax you pay on your personal income and you see why investing through your SMSF makes sense.
- SMSFs can have up to four members in the fund allowing pooling of more resources from others with similar financial objectives. This can allow you to reach your goals sooner than you otherwise would on your own.
Before you open up a self managed super fund, you need to get professional advice and you will have to carefully analyse the SMSF rules to find out if it is the right thing for you.
For more information or to talk to one of our expert, friendly advisers about your SMSF options, please call us on 1800 979 888.
Are you looking to start a new business?
Starting up a new business is no simple task. You have a lot on your plate to make sure that it does well. With your focus primarily on the products or services, you may not invest enough of yourself into the other vital aspects of a business. Accounting is one area that business startups have to look out for when getting everything set up. We at Key Business Accountants Parramatta can help you get everything figured out when it comes to small business accounting. Having specialists in this area will ensure that your business accounting is set up perfectly without worrying about taking time away from other important aspects of the business that require your attention. We specialise in new business advice in parramatta and surrounds.
Most likely, you want to start a business out of passion for what you do or because you know how to do it and feel it is the best decision for you. Regardless of why you decided to start a business of your own, you most likely will not have the ability or knowledge to manage everything on your own. Few people can, especially as there is growth. We can help structure your business and manage the business accounting and taxation aspects of it; so that you can focus on what you enjoy doing. Our business accountants will provide you with information, guidance, and assistance to ensure that your business gets off on the right path with new business advice parramatta.
At Business Accountant Parramatta, we have specialists in accounting that can help you get your business off the ground. We can fill in the missing holes that your business lacks. Our knowledge of structuring and accounting will aid you immensely as you start getting a budget figured out, as you build on products and services, and as you work out a game plan. Business startups will experience exceptional growth and will open themselves up to more possibilities by hiring our professionals rather than attempting to do the work solo.
While these benefits will show immediate results, the real advantages start coming with continued use of our business accounting advice and services. When you follow what we say, you can go further than most other business startups in the same field. This is because of the disciplined approach we instill in you right from the start. Your business will strengthen and have a better chance at success. Higher income, more customers, better handling of difficult situations, and a more stable business operation will all come by applying our advice.
Contact us for your new business advice – our office can be reached on Ph: 1800 979 888
Family Daycare Tax – what do you need to know?
Key Business Accountants is committed to working with Family Day Care Schemes and Family Day Care Educators to assist with building a sustainable, tax effective business. With hundreds of Educators and a growing number of both Government and private schemes as clients, we KNOW and UNDERSTAND Family Day Care Tax. Our office deals with both educators and schemes and is happy to offer free training sessions for professionals in this industry.
Whether it be business tax considerations, GST and BAS assistance, home loans, personal insurances, superannuation, or even family budgeting, we’re here to help you make the most of your business and improve your lifestyle.
5 Family Daycare tax tips are:
- Record keeping – Keeping excellent financial records of your business transactions is essential to ensure that we can ensure your family daycare tax return includes the tax deductions you are entitled to – this will also keep you out of trouble if you get audited by the ATO
- Budget 2015 – The May 2015 Budget announced that there will be a 5% tax reduction on income tax payable on the business income received from an unincorporated small business entity (i.e. sole trader) up to a maximum of $1,000. Effective date is 1 July 2015 provided the eligibility criteria is met
- Separate bank accounts – To avoid unnecessary complications when doing your family daycare tax return you should have separate bank accounts to separate their your business transactions from your non-business (personal) transactions.
- GST Registration –Generally you must register for GST if your projected or actual annual gross business income is $75,000 or more. However consider GST Registration even if GST Registration isn’t mandatory as it provides an opportunity to reclaim GST paid on business expenses.
- Budget for expected income tax liabilities –You will typically need to pay income tax on income earned over $20,000. To avoid a nasty surprise when you get your family daycare tax return is prepared ensure you put aside sufficient money for any expected income tax liabilities at the end of the financial year
While not endorsed by Family Day Care Australia we try and work as closely as possible with Family Day Care Australia as well as the federal government and are committed to ensuring the Family Daycare industry is sustainable long term.
For further assistance in understanding family daycare tax please contact Key Business Accountants. For an appointment, or a confidential discussion of your needs, please contact our office on 1800 979 888.
Are you looking for Accountants for your new Franchise?
We love franchises and are often Accountants for new franchise, we actually love all new businesses to tell you the truth but some of the best business models out there are franchised – but so are some of the worst! At Key Business Accountants we can help you – whether you are a business looking at franchising your model, an existing franchise chain or buying a franchised business we can help you navigate what can be a tricky area.
Our CPA accountants all have experience working with franchises. We can help with a range of services such as the basics;
- Tax returns
- Company or trust set ups for your new business
- Bookkeeping and systems – these days we have mainly moved to cloud based stuff like Xero and QBO but if you want we can help you with MYOB and the older programs too…
through to more advanced topics and services like;
- Advice on if your chosen franchise is for you and your family – all business models are different, often people focus on risk and return but what about lifestyle, the hours and stress involved and how that will effect your family?
- Advice on setting up a franchise business model – especially in terms of pricing and sustainability of your model. Franchising can be a tough proposition to get off the ground as you need to balance the need to charge sustainable fees to new franchisees with your growth plans and pricing expectations of your target franchisees.
- Sales and marketing strategies, so you have a great business, you have sorted all the legals now what?
- Training your franchisees in business basics – either at induction training or at regional or national conferences. On average we train 100-200 new or young business owners at training events all around Australia every single week! – really we do and we do it typically 100% for free….
A handful of the franchises we have worked with;
- Hire a Hubby
- A large range of cleaning franchises
If you want more detailed information on tax and accountants for new franchise here is the specialised info the ATO has published on the area; Franchising & the ATO
If you would like to discuss your business plans we would love to hear from you! Give us a call on 1800 979 888
Tax Return Taxi Driver
Do you operate a Taxi and need help with your Tax? We have specialist Accountants ready to assist you operate your Taxi business and minimise your tax bill, while maximising your return.
We can help you:
- Set up record keeping to make sure you easily comply with the law
- Minimise your tax bill
- Give you advice on GST, Income Tax and business structuring and set up
- Taxi sale and purchase
- Do your BAS and Books
- Do your end of year tax returns
At Key Business Accountant we pride ourselves on providing top quality services for you and your business. So if you own or operate a Taxi please don’t hesitate contact us to find out how we can help you with all your taxations needs.
For an appointment, or a confidential discussion of your needs, please contact our Tax Accountants today, or call 1800 979 888.