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Can You Claim Depreciation on Property Purchased in Your Super Fund?

Superannuation QSI don’t go through a day of emails without someone telling me to  “Buy property in your super fund”.

If you do there are some advantages. As a matter of fact, I purchased Washington Brown’s head office in my own super fund.

However, you still need to take note of some things. On the positive side the income you get from the rent will only be taxed at a 15% maximum rate, on the downside you will only have a maximum benefit of 15% for any depreciation you claim on that property.

Let’s use the two scenarios below to simplify it.

  1. Property in Super Fund name: Tyron Hyde Family Super Fund

Depreciation on the 1st year is at $10,000 as calculated in the depreciation report.

Your maximum tax benefit is the amount ($10,000) multiplied by 15%, giving you $1500.

  1. Property in Personal name: Tyron Hyde

Depreciation on the 1st year is at $10,000 as calculated in the depreciation report.

Your maximum tax benefit is the amount ($10,000) multiplied by 45%, giving you $4500. (That is, if you are on the highest marginal tax rate)

Therefore, if I was buying investment property in my super fund, I would high yielding properties to maximise the lower tax rate income.

Any depreciation I get thereafter is a bonus!

Note that it is still important to get a depreciation report for a property in your super fund.

If you need a depreciation schedule for your investment property – get a quote here or work out how much you can save using our free calculator.

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