Integrity One Wealth Advisers  Pty Ltd

Renting out your property or holiday home

If you rent out property, you need to:

• keep records right from the start
• work out what expenses you can claim as deductions
• work out if you need to pay tax instalments throughout the year
• declare all rental-related income in your tax return
• consider the capital gains tax implications if you sell.

If you have an investment property that isn’t rented or available for rent, such as a holiday home, then you generally can’t claim deductions because it doesn’t generate rental income.

If you invest in (buy) a rental property or holiday home, you will need the date of purchase and costs of buying the property as part of your records. The date you enter into the contract is the purchase date (not the settlement date) for capital gains tax purposes.

Co-owning rental property

If you co-own the property you will need to know your ownership interest, to make sure you:

• keep the right records
• report the correct share of the rental income
• claim the correct amount for expenses you incur.

Buying a home

If you buy a home (your main residence), you should also keep records. You will need these records to make sure you don’t pay more tax than you need to, if you later decide to:

• make your residential property available for rent
• rent out all or part of your home through the sharing economy
• use all or part of your home to produce income.

Investment or business

Most rental activities are in the form of an investment. See, Rental property as investment or business, to work out if your activities amount to:

• carrying on a business
• a domestic arrangement
• sharing part of your home
• normal commercial practices.

If you are investing in property you intend to rent out as affordable housing, there are registration requirements and criteria you need to meet.

Foreign resident investors

If you are a foreign resident or a temporary resident and you plan to invest in residential rental property, you will first need to:

• apply for approval, pay the application fee and wait to be approved before you make a purchase
• keep the right records
• report the correct share of the rental income.

Talk to us if you have any questions.

Source: ato.gov.au June 2024
Reproduced with the permission of the Australian Tax Office. This article was originally published on https://www.ato.gov.au/individuals-and-families/investments-and-assets/property-and-land/residential-rental-properties/owning-and-renting-a-property-or-holiday-home
Important:
This provides general information and hasn’t taken your circumstances into account.  It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.
Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.

Integrity One Wealth Advisers  Pty Ltd

For Australians approaching retirement, recent market volatility may feel like more than just a bump in the road.

Unlike younger investors, who have time on their side, retirees don’t have the luxury of waiting out downturns. A sharp dip just before, or as you begin drawing down your superannuation, can leave lasting damage.

It’s not just about watching your super balance dip.

The real danger comes if you need to start withdrawing funds during a slump. Doing so can lock in losses and make it harder for your remaining savings to recover. The timing of poor market returns is known in finance circles as “sequencing risk”. And it can shorten the life of your retirement savings.

What’s going on in markets?

So far in 2025, global shares as measured by the MSCI World Index have fallen 4.6%. Concerns over stubborn inflation and trade tensions that will hurt growth are keeping investors on edge.

If your superannuation is in a “balanced” option, with diversified investments in stocks, bonds, private markets and cash, your balance will have fallen by less than this amount.

Zoom out and the story looks better. Over the past year, total returns for the MSCI index remain strong, up 6.5%.

It’s a reminder that downturns are often followed by rebounds. We saw this during the COVID crash in 2020, when markets plummeted, only to recover more than 50% over the following year.

Still, for those nearing retirement, the timing of these dips matters more than the averages. Uncertainty makes planning all the more crucial.

Is your super still in high gear?

Many Australians don’t know exactly how their super is invested. Most people are in default “balanced” or “lifecycle” options, which automatically shift from high-growth assets like shares to safer investments like bonds and cash as retirement approaches.

This design helps cushion your balance from big market hits as you near retirement. But if you’ve chosen a high-growth option or haven’t reviewed your investment settings in years, you could still be heavily exposed to volatility.

In that case, now’s the time to consider your options:

• delay retirement by a year or two to give your portfolio time to recover
• move to part-time work instead of retiring fully, reducing how much super you need to draw down
• review your budget. You can’t control the markets, but you can control your spending plans.

Don’t panic – reacting emotionally can cost you

When markets fall, it’s natural to feel the urge to switch your portfolio mix from stocks into cash. But this can turn temporary losses into permanent ones.

Instead, consider more measured steps. Transition-to-retirement strategies let you draw a partial income while keeping most of your super invested.

Annuities – which offer guaranteed income for life or a fixed term – are another option. Newer products also address longevity risk, which is the risk of outliving your savings.

What does a 5% drop really mean?

Let’s say you’re 65 and have a super balance of A$200,000 (for men, that’s roughly the median; for women, it’s lower due to factors like lower lifetime earnings and career breaks).

A 5% fall translates to a $10,000 loss. That might not seem huge, but if you were planning to draw down 5% of your balance annually – about $10,000 a year – that loss could effectively wipe out an entire year’s retirement income.

It doesn’t stop there. If left invested, that $10,000 could have continued to grow. Over a 20-year retirement, and assuming a 5% annual return, that $10,000 could have grown to over $26,000.

For retirees with smaller super balances or higher withdrawal rates, the impact of a market dip can be even more significant.

Many experts now expect long-term returns to be more modest than in recent decades. Ageing populations, climate change and shifting global dynamics are likely to weigh on growth.

This makes it even more important to avoid switching entirely into cash, which can erode your savings through inflation over what could be a 20- or 30-year retirement.

A smarter path to retirement

The best approach is to gradually shift your investments in the years leading up to retirement – not all at once in response to a market dip. Lifecycle options do this automatically, but if you’re managing your super yourself, it’s worth getting advice.

Your super fund’s website likely offers tools and calculators to help. ASIC’s MoneySmart retirement planner is another great resource. And don’t underestimate the value of calling your fund to ask:

• How is my super invested?
• Does this match my age and risk tolerance?
• What are my options if I want to make changes?

The bottom line

Retiring in a volatile market isn’t easy, but panic isn’t a plan. By understanding your investment mix, taking advantage of flexible retirement strategies, and seeking advice when needed, you can navigate uncertainty more confidently.

Planning for retirement isn’t about avoiding all risk – it’s about managing it. With the right tools and mindset, you can stay on course, even when markets wobble.

Source: https://theconversation.com/markets-are-choppy-what-should-you-do-with-your-super-if-you-are-near-retirement-255017

Integrity One Wealth Advisers  Pty Ltd

Stay up to date with what’s happened in the Australian economy and markets over the past month.

Wars in Europe and the Middle East, volatile oil prices and shifting US policies are making headlines – but failing to dampen market optimism.

The ASX closed the financial year with a near 10% return – its strongest since the COVID-19 crisis and despite US tariff threats.

Despite tariff risks for the US economy, the S&P 500 index surged to a four-month high on hopes of future rate cuts and smooth trade negotiations.

Click here to view our update.

Please get in touch on 03 9723 0522 if you’d like assistance with your personal financial situation.

Integrity One Wealth Advisers  Pty Ltd

Stay up to date with what’s happened in the Australian economy and markets over the past month.

There was a sigh of relief all round when the Reserve Bank lowered interest rates in May by 25 basis points to 3.85%.

Markets largely recovered from April’s losses during the month as US President Trump’s stance on trade softened.

However, the legal and economic uncertainty of US tariffs remain a key concern for global and local markets.

Click here to view our update.

Please get in touch on 03 9723 0522 if you’d like assistance with your personal financial situation.

Suite 2, 1 Railway Crescent
Croydon, Victoria 3136

Email: integrityone@iplan.com.au

Telephone : 03 9723 0522

Integrity One Facebook

This information is of a general nature and does not take into consideration anyone’s individual circumstances or objectives. Financial Planning activities only are provided by Integrity One Planning Services Pty Ltd as a Corporate Authorised Representative No. 315000 of Integrity Financial Planners Pty Ltd ABN 71 069 537 855 AFSL 225051. Integrity One Planning Services Pty Ltd and Integrity One Accounting and Business Advisory Services Pty Ltd are not liable for any financial loss resulting from decisions made based on this information. Please consult your adviser, finance specialist, broker, and/or accountant before making decisions using this information.

As the federal government moves to introduce a new 15 % tax on superannuation earnings above $3 million (known as Division 296 tax), concerns and debates have emerged about the broader implications for investment strategies, retirement planning, and even the property market.

It is intended that once passed by Parliament, the new tax – which doubles the tax rate from 15 per cent to 30 per cent for balances that exceed $3 million – will apply from July 1, 2025.

The tax change is expected to directly affect less than 0.5%  of investors or around 80,000 people.

Treasurer Jim Chalmers describes the increase as “a modest change” that will make “concessional treatment for people with very large superannuation balances still concessional but a little bit less so”.

He says it will help fund other priorities such as Medicare, cost-of-living relief and tax cuts.

The Grattan Institute says tax breaks on super contributions cost the federal budget nearly $50 billion in lost revenue each year.

The Institute says that, while super is intended to help fund retirement, it has become a “taxpayer-subsided inheritance scheme”. By 2060, Treasury expects one-third of super withdrawals to be as bequests – up from one-fifth today.

How will the rate be calculated?

The formula for the additional tax payment due calculates the difference between the member’s total superannuation balance for the current and previous financial years and adjusts for net contributions (which excludes contributions tax paid by the fund on behalf of the member) and withdrawals.

An earnings loss in a financial year, can be carried forward to reduce the tax liability in future years.

The calculation of earnings includes all unrealised gains and losses.

Implications for investors

The Grattan Institute says taxing capital gains as they increase removes incentives to “lock in” investments. “But it can create cash flow problems for some self-managed super fund (SMSF) members who hold assets such as business premises or a farm in their fund,” the Institute says.

Many commentators speculate there will be a major change to asset allocation in super, particularly in SMSFs, as a result of the move to tax unrealised gains.

Meanwhile, one property analyst predicts a structural shift in property investment with commercial real estate becoming more attractive because of its stronger income yields relative to capital growth.^v

The new tax could also reduce the appeal of super as an inheritance tool with investors likely to explore alternative wealth transfer methods.

Navigating the changes

With the tax changes looming, we’re helping clients to ensure their portfolios will continue to meet their expectations.

For those looking to minimise their exposure to the tax, there are a number of strategies that may be useful.

These include:

1. Diversifying investments outside of superannuation by, for example, making direct investments in equities, bonds or private businesses.
2. Considering alternative retirement savings vehicles such as family trusts.
3. Actively planning to optimise tax efficiency by, for example, structured withdrawals to keep balances below the $3 million threshold, making use of tax exemptions and considering asset reallocation.

The new tax marks a significant shift in Australia’s retirement savings landscape. While the government argues that the measure is modest and targeted, its long-term implications—particularly the taxation of unrealised gains—could reshape investment strategies for high-net-worth investors.

For those nearing retirement with a high super balance, careful financial planning will be essential and all investors who could potentially be affected, should be reassessing their portfolios and weighing up whether alternate wealth management strategies may be an option.

Please get in touch if you would like help to navigate the changes.

Suite 2, 1 Railway Crescent
Croydon, Victoria 3136

Email: integrityone@iplan.com.au

Telephone : 03 9723 0522

Integrity One Facebook