Save articles for later
Add articles to your saved list and come back to them any time.
Land tax on our holiday home has increased from $4,000 a year to $19,000 a year within two years. We are considering selling our home and moving down to our holiday home to eliminate this expense, as it is simply unaffordable for us. Will this work?
Land tax is a state-based tax, and therefore you would need to check with your local accountant to be clear on the rules in your jurisdiction.
Land tax on properties has increased significantly in the last few years.Credit: Simon Letch
Given the magnitude of your increase, it’s probable that you are in Victoria, where land tax increases have been the most significant. In Victoria your land tax liability is assessed as at the 31st of December. Your primary residence is excluded from land tax, so your plan to get down to a single dwelling would solve your land tax problem.
You need to consider the timing, however. If you sold your home with settlement on the 1st of January, you would be liable for land tax in the new year because on the 31st of December you still owned both properties.
When you sell your home, give some thought to making downsizer contributions into your superannuation accounts. The timing on these is quite tight, so talk to your financial planner before settlement to ensure you have all of your ducks in a row.
I am self-employed and will be turning 60 soon. We still have a mortgage on our home, and with the increase in interest rates I’d like to get that paid out. How much can I take out of super without shutting down my business?
It’s not what do you want to hear, but the answer is none.
Superannuation savings can become accessible from age 60. However, you need to have ceased gainful employment. Where you are a self-employed business owner that would mean ceasing to trade. From age 65 onwards you have full access and can do as you please.
The only exception to this would be if you have some unpreserved funds within your superannuation account. These days unpreserved monies are fairly rare, but it would be worth giving your super fund a call and checking just in case.
What is the difference between binding and non-binding beneficiary nominations for my super fund?
A binding nomination means that in the event of your death the trustee of the superannuation fund must pay out your balance precisely as you have requested on your nomination form.
Non-binding instructions provide the super fund trustee with some discretion. They still must ensure that your savings go to an appropriate member of your family, and in almost all cases will follow what you have stated on your nomination form. However, there could be instances where it would be preferable for an alternative arrangement to be made.
As an example, perhaps a beneficiary has been nominated who has developed a gambling problem, or there is someone in their life exerting undue influence. With a non-binding nomination, there is the opportunity for other members of the family to apply to the superannuation trustee to vary the instructions. For instance, they could request that the beneficiaries’ entitlement be placed in trust and managed by a responsible person, to protect the payout.
Most people go with binding nominations because they want the certainty of knowing that their wishes will be adhered to. However, in reality, the non-binding option does hold some benefits.
Paul Benson is a Certified Financial Planner, and host of the Financial Autonomy podcast. Send your questions to: [email protected]
- Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.
For expert tips on how to save, invest and make the most of your money, delivered to your inbox every Sunday, sign up for our Real Money newsletter here.
Most Viewed in Money
From our partners
Source: Read Full Article