I am a retiree who lives from my supermarket.  Where should I invest $450,000?

I am a retiree who lives from my supermarket. Where should I invest $450,000?

I am a retiree who has an SMSF and receives a pension from the fund. I just sold an investment property that will net me about $450,000 after expenses. Where should I invest this sum? I already have about $860,000 in a stock portfolio and $300,000 in time deposits.

Assuming you’re under 75, don’t forget to make the maximum concessional contribution of $27,500 in super to reduce capital gains tax on the property sold.

When it comes to investing for retirement, super is usually a safe bet.Credit:Louis Douvis

Super is also useful for its tax advantages, so you can then make a non-concessional contribution of $110,000 in 2022-23 and, after July 1, an additional ‘bring forward’ amount of $312,500, bringing the total to $450,000, always assuming you are below your personal transfer balance limit.

Your pension fund is tax-free, just like your pension in your hands. He can always withdraw the money if he later needs it elsewhere.

I am almost 40 years old, single and work full time from two houses in NSW. The first one, without a mortgage, is in Sydney, I bought it in 2008 and lived there for 13 years. The second is in the Blue Mountains, which I bought in 2021 and moved into while renting the Sydney house. This second house is a double dwelling and I rent most of it. I thought I would keep the house in Sydney for as long as I could but now I think it might be wiser to sell it as I am subject to property tax because both of my houses produced income. As I understand it, if I sell the house in Sydney within six years, I can designate it as my primary residence and receive the full CGT exemption. However, for land tax, I must select the Blue Mountains home as my principal place of residence in order to have a partial land tax exemption. Am I still entitled to a full exemption if I sell my home in Sydney within six years from the day I rented it out, even if Revenue NSW considers my home in the mountains my principal residence?

Charging

Interesting question. Capital Gains Tax, or CGT, is based on federal law, while Revenue NSW implements state law.

Under CGT rules, you can claim a home as your primary residence for up to six years after you move, as long as you don’t claim another home is exempt from CGT. This is not affected by any decision you make regarding land tax.

Under NSW land tax regulations, if you rent out part of your home, you can still claim an exemption from land tax as long as the rented part of your property is an apartment, a room, or both. If you rent a larger part of your home, you may receive the partial exemption you mention.

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