We have a house that is worth approx $800,000 and we have just purchased a property in Queensland for $420,000. We would like to move up there but are unsure whether to rent out our current home or sell it? If we do sell it can we put any surplus funds into our super without it being taxed? We are about to hit our 50's and haven't got much super. We need to know what our options are.
Any advice would be helpful
You need to obtain independent Financial Advise from your tax accountant and registered Planner
However the fact you have NO debt on the Melbourne Property means you cannot dilute the interest payable on Qld which is NOT tax deductible.
Provided you stay within the annual contribution limits, then yes you could put the sale proceeds into super.
The type of contribution would be a non-concessional contribution. This type of contribution is not taxed when you contribute the money to super, provided you stay within the limits.
Limits are $100k pa or 'bring forward' three years worth of your limit for up to $300k in one go.
It's big numbers involved here so best to see professional financial advice - I can help if you want it.
As James states, there are limits you can shove into Super which is after-tax dollars.
So you sell the house in Melbourne and it should be tax-free because it is your primary place of residence.
You can only have one primary place exemption at any one time.
Whether you rent or buy you really should run the numbers including Income, Tax, capital allowance deductions and tax effect.
You will probably have to several hundred dollars getting a good accountant to run the numbers but it will be worthwhile in the long run.
This is a question to be answered in a full appraisal by a financial adviser/planner to ensure that your longer term needs and goals are discussed and considered.
For what it's worth, my thoughts would be that if you can keep it and afford the lifestyle you desire then hold it until you retire and then reassess.
Your borrowing base for tax purposes would be the $250k loan which should be more than covered by the net rent of the property. Unfortunately, you are not allowed to add to this loan to purchase the Qld property and deduct the additional interest.
Try getting in touch with James on here or Endorphin Wealth in the city and at least have a discussion before you make the decision.
Best of luck, enjoy the warmth
To add to the answer, you can contribute $100k per annum or bring forward an additional 2 years and do a lump sum of $300k as a non concessional contribution to both yours and your spouses' superannuation.
Depending on your tax position, you could also look to fully exhaust your concessional contribution limits ($25k per annum).
However, you may not want to make non concessional contributions to superannuation. If you or your spouse have no taxable income, you are better off investing in your name, rather than superannuation. Superannuation is taxed at 15% and you can earn approx. $20k per annum in your own name without paying tax which could be around the $500k.
There is lots of things to consider regarding what would be the best thing for you, so I would suggest seeking advice or provide further information around your income, assets and liabilities.