A Property blog by Paul Bennion.
With the average life expectancy of Australians now at eight decades and more, it is becoming apparent that superannuation savings will simply not be enough for most people to fund an independent retirement.
Currently, the average annual returns from superannuation funds are barely above the annual inflation rate of around 1%. In addition, the average superannuation savings for most people aged over 60 are currently not enough to fund their retirement for 20 years and more.
That is why more people are turning to property to fund their retirement and there is good reason why they are doing so.
For example, the latest CoreLogic figures show that for the year ending September 2016, property values across all Australian capital cites grew at an average annual rate of 10.9%.
In Sydney average property values surged by 13.9% and by 12.3% in Melbourne while in Brisbane values jumped by 7.6% which was still well above the annual inflation rate.
These positive returns delivered by investing in property, is a key reason why one in five Australian homeowners now own at least two properties.
Overall, figures from the Australian Bureau of Statistics show that 21% or one in five households own a property other than their own home.
The reality is that most people dream of becoming personally wealthy and over recent years there have been an increasing number of people who have become financially independent through property investment.
This is particularly the case for property investors who hold real estate in the booming Sydney and Melbourne property markets.
This is underlined by DEPPRO’s own figures which show that a rising number of our clients own more than five investment properties as they build a successful property portfolio to fund their retirement.
The tax benefits associated with property investment is also encouraging this trend of multiple property ownership.
Property investing still allows people to claim generous tax benefits associated with negative gearing as well as depreciation.
The tax benefits associated with tax depreciation can be very signification with DEPPRO clients achieving tax benefits obtained through depreciation equivalent to 60% of the total purchase price of the property.
To qualify for these legitimate tax deductions, an investor must have a fully compliant tax depreciation company undertake an onsite inspection of the property and then compile a depreciation report based on this inspection.
Property investors should therefore check that the company undertaking their tax depreciation schedule is a member of The Australian Institute of Quantity Surveyors (AIQS).
Employing a company who is a member of AIQS such as DEPPRO gives protection to consumers that their tax depreciation report complies is completed in a professional manner.