Ralph no worries for property syndicates
Potential investors in property syndicates need not be afraid of the Ralph tax reforms, according to one industry pundit.
Potential investors in property syndicates need not be afraid of the Ralph tax reforms, according to one industry pundit.
Austgrowth Property Syndicates’ managing director David Davies says straight prop-erty syndicates will continue to attract growing interest from investors because they won’t be affected by the reforms. Research group Property Investment Research cur-rently estimates the market is worth more than $2 billion.
Davies also says the amount of tax paid by a superannuation fund to invest in property syndicates via a unit trust structure will be minimal, under the new proposals.
“At the end of the day, it should make no real difference at all,” Davies says.
In fact, the only negative impact of Ralph is the proposal to abolish accelerated depre-ciation allowances, which are usually associated with syndicates. However, Davies argues that the type of investor who is drawn to this type of product is not looking for short term tax write-offs which actually does no more than to defer tax liability.
“We have a very select interest in the market. Our client base of syndicates is very sophisticated,” he says.
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