The benefits of SMSF

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The popularity of Self Managed Super Funds (SMSF) has surged in recent years and now represents nearly one third of all super assets. Why?

The main appeal of this investment is freedom to choose your own destiny. SMSF also allows you to invest directly into residential and commercial property - an option not generally available through other super arrangements.

Depending on your circumstances it can be more more tax effective to buy property through an SMSF rather than buying one outside super. This is because the rental income is taxed at the superannuation tax rate of 15% compared with your marginal tax rate. Once you retire there is also the possibility that the SMSF can pay you a pension tax free.

When the property is eventually sold, capital gains are effectively taxed at 10% (if owned for more than 12 months) and can potentially be tax free if the pension period has started.

The financial benefits of investing in property through SMSF can be significant however property investment rules differ so sound financial advice is essential to ensure decisions made are compliant and reflect your investment strategy.

The future value of your development

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South Australia's population grows by almost 1%

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Recent data released indicates over the 12 months to June 2011 the South Australian population grew by 12,849 people or by 0.8 percent.

This increase in population was made up of a natural increase in population of 6,795 people while net overseas migration added an additional 8,667 people.

Net interstate migration was responsible for a loss of 2,613 people.

It appears that South Australia's population future continues its past of steady as she goes. Which isnt necessarily a bad thiing.

The slow gradual growth in the states?economy acts as a buffer from the boom and bust that can traditional associated with the property cycle. However it is difficult to say how long this will last as the predicted mining boom comes to fruition.

Talking to council

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Once you have decided on a block of land it is crucial that you talk with the local council about your intentions to build to ensure?that you are fully aware of any special by-laws, policies or planning aspects in the area or restrictions relating to the land.

When discussing any relevant planning requirements it may also be a good idea to check whether there are any restrictions that have the effect of dictating the materials you use, the style of your house or the timeframe for building.

You may also enquire as to any plans for the area that might affect your enjoyment of the property. Development to be particularly wary of include such things as commercial or industrial activity or road construction which may involve excessive noise or produce unpleasant smells.

Items to consider when lodging an application for Planning Approval include:

Site Coverage Floor Areas this limits how much the block can be covered by buildings

Private Open Space an area of open yard which is private and useable should be provided

Car Parking Driveways areas must be provided for cars to park off the street

Building Appearance the new home should meet the desired character of the area

Energy Efficiency all new houses must have a 6 star energy rating to minimise energy use

Site Frontage Widths ensure the new house has a desirable visual appeal from the street

Front Setbacks this is the distance from the front boundary to the closest part of the house

Side Setbacks are important to ensure adequate daylight to side windows

Rear Setbacks ensure the new dwelling has a useable outdoor area in the backyard.

Some dark clouds on the horizon for builders

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Builder AV Jennings is suffering from the decline in construction activity as it prepares to report a net loss of up to $32 million.

With construction activity down 20% from its peak it is difficult to see things turning around soon as people continuing to put off buying new homes.

Excluding the write downs, AV Jennings expects make a net operating profit of $5.1 million for the year to June 30. However, when the write downs are taken into account its net loss will come in between $27 million and $32 million.

The company says that lower volumes and margins flowing from the deterioration in the residential homes market, particularly in regional areas, were to blame.

In a statement AV Jennings said 'the negative consumer sentiment appears to be driven by a number of factors including concerns over the impact of macro-economic factors in Europe and the United States, and the impact on Australia of any slowdown in China'.

The company also believes that it may also be as a result of concerns over the political climate following the last federal election. The effect of this is that some buyers appear to be delaying purchasing decisions.''

Although now represents a fantastic opportunity to take advantage of the great deals on offer from builders it is essential that know exactly what they are getting into when signing a contract.

There is much more to building a house than just signing the initial contract. All too often people believe they have negotiated the best price only to find out later that the builder has left out essential items and taken short cuts to recoup the cost.

Now more than ever it is important to get expert guidance and advice when negotiating with builders to ensure that you are not only getting the best price but also the best quality and service as well.