Super tax changes cleared in Parliament on Wednesday have spurred self-managed super funds to sell property before the new rules take effect on July 1 2017, according to the Australian Financial Review.
Under the new regime, there will be a $1.6 million ceiling on the amount of super savings allowed within a tax-free private pension.
Currently,
SMSFs are able to sell assets such as property without paying capital gains tax as all money in a super pension is tax free, but when the changes kick in only the portion of the property that can be attributed to the private pension will be tax-free, the AFR reported.
As a result, some SMSFs are selling their investment properties to avoid exceeding the cap, but advisers are heeding caution against selling solely for tax concerns.
"With investing, make an investment decision first and make sure it is not driven by tax outcomes. Don't jump at decision-making based on tax alone," said Colin Lewis, head of strategic advice at Perpetual Private.
According to commercial agent CBRE, more than 25% of Melbourne listings in November and December were super fund-owned.
"A number of these owners have received advice that there could be significant tax implications should they continue to hold these assets in their super fund post June 30 next year," said CBRE agent Rorey James.
Duncan Fairweather of non-profit
SMSF Owners' Alliance said, "It may be that some trustees with pension accounts in the retirement phase are deciding to sell property assets now while they are free of capital gains tax, rather than allocate them to an accumulation account where they will be subject to capital gains tax from July 1 next year.
"Or they may just be so confused, nervous and fed up with the very complex superannuation changes that they have decided to be done with it, sell their property assets and take out the money or hold it in cash."
