But wait there’s more, not only can you get a tax-free investment but you can earn an income and even contribute $300,000 each to superannuation tax free, no matter what your age!
Sounds too good to be true right?!
Your principal residence is capital gains tax free
Well, you probably already know that if you sell your own home, the profit, or capital gain, is tax free. A lot of people start growing their wealth from buying a home, renovating it and selling it to trade up. This is a common strategy by those with a little ingenuity, ambition and plenty of energy.
Joey bought a house in Sydney for $250k in 1995 and did a bit of work to it over the years. In 2020 he sold it for $2m. He even earned an income off it for about 5 years from renting it out. All tax free in 2020!
Things get complicated now when you get a job overseas
Under section 118 of the Income Tax Assessment Act – I know you’ve probably read every exciting fun filled page so I’ll be brief – you can live outside of your principal residence for up to 6 years, earn an income from it and potentially sell it tax free. It’s called the 6-year rule!
Well, at least everyone used to be able to. So now what do you do if you get an overseas posting? You better be careful, because if you lose your tax residency and sell, you could be up for a big tax hit!! This change of law happened in December 2019 but of course got very little air time!
You can knock $300,000 into super EACH!!! Tax free when you retire to boost your super!
As of July 2018, you can downsize your house if you are in your golden years and contribute up to $300,000 into super or $600,000 ($300,000 each) as a couple. What a bonanza! But only 15,000 have taken this up in the last 2 years so let’s not keep it a secret!
If you or someone you know needs help, don’t keep me a secret – I’d love to help. Good advice can boost your assets by hundreds of thousands of dollars and bad advice can be catastrophic.
So, feel free to drop me a line by clicking below.
Thanks for reading!