Property, Superannuation, Tax

Negative gearing change to increase super appeal

The change to the negative gearing rules the Labor Party is likely to introduce should it win power at the next federal election could make superannuation an even more attractive investment vehicle from a tax perspective, a mid-tier accounting firm has predicted.

“Most people negatively gear because they’re really looking for a tax benefit. That’s the primary driver and if this is no longer an option for them, where do they now look to go to?” HLB Mann Judd Sydney wealth management partner Jonathan Philpot said at a media briefing in Sydney earlier this week.

“I think superannuation and the ability at the moment to be able to top your own superannuation up to that concessional limit of $25,000, there might be $5000 [of super contributions] available that you can then put in and claim a tax deduction.

“[This is] particularly [relevant] for those over age 40 [and] this might be the go-to [strategy for them if] they’re really just looking for a tax benefit more so than thinking about the retirement benefits.”

However, he warned another Labor proposal if it wins government is the elimination of the ability to make personal deductible super contributions, but said if this did not eventuate, he could see an increased attraction toward super.

“If that wasn’t scrapped, I certainly think that might be perhaps a far bigger tax deduction that people will look to implement,” he said.

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