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SYDNEY - Just weeks out from the cut-off date for a once-in-a-lifetime tax windfall, Australians are placing up to A$80 billion ($90 billion) into their superannuation funds.
Empty-nesters are trading in the family home for smaller units to shift the balance into superannuation, while multimillion-dollar loans are being taken out against property to put into super, Fairfax reports.
Real estate agents have reported massive loans being taken out as the July 1 deadline for after-tax superannuation contributions approaches.
Under changes introduced in last year's Budget, investors will be limited to making after-tax super contributions of A$150,000 a year, or A$450,000 averaged over three years.
However, transitional rules allow contributions of up to A$1 million between May 10 and June 30 this year.
The benefit is that while income earned from other investments will be taxable, after July 1, income earned from super will not, so long as it is taken after you turn 60.
The rush to meet the deadline has prompted tax commissioner Michael D'Ascenzo to warn people to think twice. Interest payments on loans taken out to fund super contributions are not tax deductible, D'Ascenzo says.
"[People should make sure] they are not caught out by [tax] liabilities that could arise down the track."
Australian Property Monitors analyst Michael McNamara said a sales boom in traditional weekender areas of the NSW southern highlands showed baby-boomers were selling their properties to take up the super offer.
-AAP
