BIS Shrapnel associate director Kim Hawtrey said that while a lot of Australians would be hesitant to move their wealth into property in the short-term given the “property cycle is now near its peak”, over the longer-term the changes to super could mean more wealth becomes invested in the property sector.
“If you subtract the timing of the cycle then in principal if the tax advantages of property are relative to super, then you should see money move over time,” said Mr Hawtrey.
Mr Hawtrey said he believes that discretionary superannuation over and above the mandatory is on the decline.
“There is a lot more uncertainty because of policy changes to the super system, so people are becoming a bit more hesitant about putting money into super because politicians are tampering with it,” he said.
“That might make the money that would’ve been going to super go to property more than anything else.”
It will send money offshore – and as much to avoid the useless complexity as anything else. There are offshore financial products which offer a not much higher tax rate but with none of the administrative costs and with better asset protection against super splitting in divorce or against bankruptcy clawback.
Treasury has not been very smart in making less attractive the wealth sector which helped Australian public companies through the GFC
Dr Terry Dwyer
Dwyer Lawyers