This webinar provides strategies for property investors to minimize taxes and maximize wealth through proper structuring. Tony Lee from Lee & Lee Accountants discusses the top 5 tax strategies, how to determine the optimal ownership structure, and investing in property through a self-managed superannuation fund (SMSF). The webinar includes a case study of a couple who can benefit from an SMSF to develop a duplex and build their superannuation balances.

1. Master Class:
StructureYourWay to Success
With
David Hows - Real Estate Investar
Tony Lee – Lee & Lee Accountants

2. We help investors
build and manage
their property
portfolios

3. In partnership with…

4. Real Estate Investar’s tools

5. Master class webinars
• Designed to share knowledge.
• Desire to provide extra value to
our clients.
• Great for both new and
experienced investors.
• Plenty of opportunity for Q&A.
• We will run these regularly
throughout the year, and
sometimes involve our partners
to provide additional insight.

6. Poll Question
How many investment properties do you own?

7. Structure Your Way
to Success
Connecting the Dots Together

8. Meet the presenterTony Lee
 Founder and Director of Lee & Lee
 Property tax, investment and business
structuring expert with 20 years experience
in helping small business owner and
property investors structure and protect
their business and investment assets
effectively, minimise their tax obligations
and build wealth.
 He has invested in property himself which
means he has faced the same issues that
property investors and developers can face.
 As a result, his team has firsthand
experience and an excellent understanding
of finance, strategies, structuring, planning
and timing when it comes to property
investment.

9. One key message
for tonight:
“It’s NOT about what you make…
it’s about WHAT YOU KEEP!”
If you do nothing, you will most likely
end up paying more tax than you need

10. Who Is this webinar for
Small business owners, property
investors and developers who;
 Want to plan to minimise your tax
 Want the best way to structure the ownership of
your investments and protect your assets
 Want to invest in property with your
superannuation fund and learn the benefits and
risks involved in buying property with an SMSF

11. What you will learn tonight
 Top 5 strategies to maximise your tax
 The keys to minimising your tax legally
 7 key steps to determine the right structure for
your property investments and developments
 How to invest in property with your
superannuation fund and learn the benefits and
risks involved in buying property with your super
in an SMSF;
 How to build a property portfolio with your
super and pay little or no tax in retirement

12. What you will receive tonight
At the end of tonight’s
webinar, all attendees can
download:
eReport “Must know tax
tips for property investors
The opportunity for a
FREE 15-30 minute one-
on-one consultation

13. 5 Top tips
 5 Top tips for property investors
 Depreciation Write off – Scrapping schedule, renovation, ATO
will pay for your scrap on fixture & fittings
 Tax variation
 Prepayment of interest & seminar, travel expenses
 Fully write off on borrowing cost for refinance
 5 Top Tips for SMSF
 You got to have one,
 Like a tax haven,
 Control & flexibility
 Insurance
 Borrowing (leverage) & residential property
 Superannuation is a trust structure NOT an investment

14. There are THREE ways to
lower your tax
To put more of every dollar in your pocket instead
of the ATOs!
Negative Gearing – Tax deduction for
interest on income earning investments. Negative
gearing is arguably the most generous tax break
available to Australian property investors.
Dividend imputation – Refund of tax paid by
companies on profits paid as dividends
SUPERANNUATION – Tax deduction for
contributions, low tax on investment earnings

15. Poll question
Does your current structure minimise tax and protect
your assets?

16. Case study – Jack & Rose
Jointly owns 4 investment properties both making $85K & $60K per year
Background:
• Happily married couple with no children
• Both healthy and fit
• Own their PPR with 50% equity and good
saving history
• Want to purchase their first 4 investment
properties
• Both combined annual income of $145,000
and can save $500 per week
• Want to use the equity from their PPR to
build and create wealth through real estate

17. Case study – Jack & Rose
Goals and Objectives:
• Minimise their personal tax
• Access to negative gearing and tax
benefit
• Not too concern about asset protection
• Start building and create wealth
• Paying down home loan quickly
• Land tax exemption
• Easy finance and borrowing
• Keep it simple and easy to maintain
• Not too complex
Solution:
• Buy in personal names (Jointly)

18. Case study – Jack & Rose
Jack owns 4 investment properties Jack without investment property
$85,164 PAYG earnings
($38,855) Rental deductions
($22,602) Depreciation & borrowing expenses
$20,872 Tax withheld
$43,982 Taxable income
$ 6,303 Tax Payable incl. Medical & Flood levy
$14,568 Tax Refund/Savings
Tax Paid 7.40%
Tax Savings 17.60%
(Before 25%,
Extra Monthly Cash flow $1,214
$85,164 PAYG earnings
($ 0) NO Rental deductions
($ 0) Depreciation & borrowing expenses
$20,872 Tax withheld
$85,164 Taxable income
$20,094 Tax Payable
$777.55 Tax Refund/Savings
Tax paid 23.59%
Tax Savings 1.41%
Prognosis

19. Lee & Lee developments
Holland Park project
© 2010 Lee & Lee Accountants

20. Lee & Lee Developments
• Bought land $337K
• DA,BA, Reno Costs $129K
• Construction 2 Duplex (SUD) $330K
• Council fees, Contributions,
& Finance, Interests, GST $183K
Total Development Costs $979K
• Re-value of project $1.5M
(3 properties)
• Nett Equity/Profit $521K
© 2010 Lee & Lee Accountants

21. A
Property
Trust
A Property
Development Company
Pty Ltd
Why is this the recommended structure for the Lee & Lee?
What can be achieved under this structure:
Asset Protection – Protection of all private family assets, including family home in the event of litigation
or personal bankruptcy;
Tax Minimisation & Flexibility - Maximum flexibility in determining and distributing taxable profits and
capital gains to family member, other loss trusts so that ultimately the minimum amount of tax is paid
Succession Planning – Maximum options and minimal CGT/stamp duty when the property is transferred
to the next generation

22. Dream Retirement Lifestyle
Be Comfortable
FREEDOM
$1.5M
Passive Income
How Would Your Retirement
Lifestyle Be Different?
Living The Dreams
Feel Safe & Secure

23. $1.5M in
Retirement!
Retirement is a
journey,
not a destination

24. 2040
Financially
independent
2013
Private schooling
for the 3 kids
2025
France for 6
months
Financial road map
2020
Mortgage
Free
2030
Holiday House
at Gold Coast

25. Aussie Hugh now needs
to decide how he intends
to get there, by when,
how much it will cost and
what risk he is prepared
to take
1 in 100
chance of
an accident
18 Hours
$200 + petrol +
accommodation
1 in
20,000
chance
of an
accident
2 Hours
20 minutes
$300
1 in 1,417
chance
of an
accident
83 to 100
Hours
1 in 50,000
chance of
an accident
25
Hours
$392

26. AUSSIE HUGH (40) now needs to decide how he
intends to get there, by when, how much it will cost
and what risk he is prepared to take.
Retirement with
$100,000 in
today’s dollars
lasting until 100
years old
Retirement
age 75
Growth
Cost & Return
Risk over 1 to 2 year
Passive income
required…

27. “Why Structuring?”
First financial battle
Making the money
Second financial battle
Keeping the money

28. Interesting statistic
“97% of all millionaires made their
money in real estate…but 79% of
those individuals lost their wealth
because they didn’t structure their
investment properties correctly”
Fortune Magazine
© 2010 Lee & Lee Accountants

29. Where does your money go?
Your income
© 2014 Lee & Lee Accountants
Tax
47%
You
53%

30. Where does your money go?
Your Income
© 2014 Lee & Lee Accountants
Tax
30%
You
70%

31. Where does your money go?
Your income
© 2014 Lee & Lee Accountants
You
85%
Tax
15%

32. Where does your money go?
Your income
© 2014 Lee & Lee Accountants
You
100%

33. WRITTEN PLANUNWRITTEN PLAN
5 Secrets of success
Purpose, Passion, Planning, People & Persistence
© 2010 Lee & Lee Accountants
Fun
Concern
Experience
Invest in property
& developments
Fun Success!
Poor structure,
unexpected expenses,
bad JVs, business
scams, ATO audit
Business booming,
making lots of money
Bankruptcy,
Divorce,
Broke,
Jail
GoodTimesNotSoGoodTimes
BA

34. Financial success plan
Property
Investment &
Development Plan
Taxation
PlanDebt Plan
Get
Financially
Organised
Asset
Protection Plan
& Structures
Goals &
ObjectiveSuperannuation
& Retirement
Plan
Estate &
Risk Plan
Business
Plan
© 2014 Lee & Lee Accountants

35. Executable plan & strategy
Investment
Property 1
Investment
Property 2
Primary
Place of
Residence
Investment
Property 3
Net wages Tax Super
Start (optimise)
$2M (now) $16M (Total freedom)$8M$4M
Saving & investing (growing) Goal accomplished
© 2014 Lee & Lee Accountants
Investment
Property 4
Set
Goal
Create
plan
STICK TO Plan
Property
Tax & finance
Family super
Risk & education
Personal development
Structure
OWNERSHIP STRUCTURE COMPANY & TRUST & SMSF

36. Commonly used tax structures
• Individual (Up to 45%)
(Plus Medicare levy / temporary flood levy)
• Partnership
• Company
• Trust (Different types of trust)
• SMSF (It’s a structure not an investment)
Give super a go
Trust
Distributes to
Individual, Trust
& Company
Company Pty Ltd
30%
© 2014 Lee & Lee Accountants
SMSF
Earning 15%
Capital Gains 10%
Pension Phase
0%

37. Keys to determine the right structure
© 2014 Lee & Lee Accountants
Asset protection
1
Limited liability protection
Tax minimisation
Flexibility
Total control
& privacy
Succession planning
Effectiveness
Finance & land tax
Complexity & costs
2
3
4
5
6
7
What is the correct structure for
your personal situation?
7

38. Master plan for your wealth
A
Trust
A Company P/L
ABC
B
Trust
B Company P/L
ABC
C
Trust
C Company P/L
ABC
D
Trust
D Company P/L
ABC
E
Trust
E Company P/L
ABC
PROFIT Distribution
PROFIT TAX LOSS PROFIT TAX LOSS PROFIT
PROFIT Distribution
© 2014 Lee & Lee Accountants

39. Master plan for your wealth
Phase 1
Phase 2
Master
Trust
A Master
Company
Bare
Trust
Trustee
Company
Super
Fund
SMSF
Company
IP Phase 3
© 2010 Lee & Lee Accountants

40. Lee & Lee developments
Annerley Project “B”

41. Lee & Lee developments
• Bought land $1M
• DA,BA, other costs $37K
• Construction 5 townhouses
& House renovation $1.12M
• Council fees, contributions,
& finance, interest, GST,
Strata & contingency $258K
Total development Costs $2.4M
• Re-value of project $3.2M
(6 properties)
• Net equity/profit $800K
Annerley Project “B”

42. What was your real intention?

43. Consider
Property investment & development
Need to consider
Income tax
CGT
GST
Land tax
Stamp duty

44. Property development agreement model
Smart Property
Developer
Alan
Property
Holding
Trust
Alan Property Owner
Company Pty Ltd
© 2014 Lee & Lee Accountants
Bruce Property
Developer & Project
Management
Company
Pty Ltd
Charlie
Investment
Holding
Trust
Charlie
Investor
Company Pty Ltd
Accountant Land Owner

45. A
Property
Trust
A Property
Development Company
Pty Ltd
Why is this the recommended structure for Adam and Eve?
What can be achieved under this structure:
Asset Protection – Protection of all private family assets, including family home, in the
event of litigation or personal bankruptcy;
Tax Minimisation & Flexibility - Maximum flexibility in determining and distributing
taxable profits and capital gains to family member, other loss trusts so that ultimately
the minimum amount of tax is paid
Succession Planning – Maximum options and minimal CGT/stamp duty/Land tax when the
property is transferred to the next generation

46. Commonly used tax structures
Single developer with a JV partner
© 2014 Lee & Lee Accountants
ABC Property
Development
Company Pty Ltd
A Property
Development
Company Pty Ltd
B Property
Development
Company Pty Ltd
A
Family
Trust
B
Family
Trust
ABC Unit
Trust

47. Commonly used tax structures
2 family groups - JV deal
© 2014 Lee & Lee Accountants
A Property
Development
Company Pty Ltd
B Property
Development
Company Pty Ltd
B
Family
Trust
A
Family
Trust

48. Appropriate record keeping

49. It’s TAXTime
Investment PropertysaveTAX

50. REMEMBER
“It’s NOT about what you make…
it’s about WHAT YOU KEEP!”

51. WHYDo you want to maximise how much of your
income you keep, so you can confidently
plan your retirement and save tax?

52. 7 Most Common Mistakes
Depreciation
Interest expenses
Borrowing costs
Discharge finance costs
Land tax
Travel & home office
Capital gains/PPR
1
2
3
4
5
6
7

53. Think Differently

54. Poll question
Are you interested in investing in property
with a SMSF?

55. © 2014 Lee & Lee Accountants
Tax differently
Accumulation
Phase
15%
(Max )
Pension
Phase
0%
(Max )

56. Benefits of family super fund
Full
Flexibility
&
Leverage
(Ability to Borrow)
CONTROL
Investment
Choice
Tax
Effective
Asset
Protection

57. © 2014 Lee & Lee Accountants
It’s tax free
It’s works like
magic
It’s beautiful
It’s controlled
by you
The magic of structure

58. How the SMSF borrowing
structure strategy works
Holding
Trust
(Legal
Ownership)
Corporate Trustee
Holding Company
Self Managed
Super Fund
SMSF
SMSF Corporate
Trustee Company
Lender
• Bank
• Member or
• Related Party
Provides Security
To Lender
Lender Provides
65-80% Mortgage To
SMSF Non recourse
(LRBA)
Rental Income
Rental Expenses
Including
Depreciation
Super
Contributions Roll
Overs
Rental Income
Declaration of
Trust,
Holds Legal
Title while
Borrowing Exists
Legally owns the
property (SMSF is sole
beneficiary and has
absolute entitlement to
bare trust property)
SMSF makes Loan
Repayment
What can be achieved under this structure:
 Owning an Income producing asset in the lowest tax environment
 Have ability to create greater after tax wealth
 More after tax dollars kept to reinvest or reduce debt
 Debt can be paid off faster before retire
 The faster a loan is repaid the less interest is charged and paid
 More saving and reinvesting for retirement for a better financial future

59. Poll question
How much super do you currently have?

60. Background:
• Happily married couple with 2 children
• Both healthy and fit
• Own their PPR with 75% equity and have automatic saving strategy
• Have already got 5 investment properties worth $2 millions
• Want to do their first duplex deal in Brisbane with buy and hold long term
strategy
• Both combined annual income of $200,000 from their successful
consulting business
• Both have combined superannuation balance of $300,000
• Want to use the equity from their PPR to build more wealth through
property development
• Already found a suitable site
• Already have available equity to draw down
• Already have finance approval for the development
Case study three – Adam & Eve
Owns 5 investment properties

61. Goals and Objectives:
• Accelerate and fast track their wealth creation
• Require control and asset protection is essential
• Tax efficiency and flexibility with income & capital gains
• Buy, develop and hold long term for capital growth
Solution:
• Buy in a company/trust structure
(GST implications to consider)
Case study three – Adam & Eve
Owns 5 investment properties

62. Set up automatic savings
© 2014 Lee & Lee Accountants
j
j
Retirement 10% pay
yourself first1
Emergency 5%
6-12 months expenses
Dream holiday
Pay off home
Credit cards, bills,
investments & charity….
3
4
5
Income (MSI)
Bank
Account
2

63. Strategy #1 The Fast Tracker
What can be achieved SMSF property borrowing strategy:
 Owning an income producing asset in the lowest tax structure in 10 years
 Creating $1,500,000 for retirement and have a peace of mind
Automatic
Savings Strategy

64. And you can tackle these problems..
© 2014 Lee & Lee Accountants
• The need to support your
family
• Reinvesting back in your
business
• Pay too much tax
• Saving for retirement to
fund your lifestyle
The biggest struggles everyone faces
There is a
to legally reduce taxes

65. Imagine yourself
20 years from now
What are
your goals
&
objectives?
What’s the
goal?
E.g.$1.5M
dream
retirement
You are here
today…
Freedom Gap

66. © 2010 Lee & Lee Accountants
What’s your
next step?
We help you make smart financial decisions and
connect the dots together and create a
remarkable future!

67. Special REI client offer
A complimentary 15-30 minute strategy
session with Tony Lee on getting the right
structure in place and taking control of
your financial future. Using an SMSF
property strategy can help reduce your tax
and increase your wealth.
Limited to ONLY 25 consultations
First in best dressed!
info.realestateinvestar.com.au/leeandlee

68. REMEMBER
“It’s NOT about what you make…
it’s about WHAT YOU KEEP!”

69. Q&A session
Limited to ONLY 25 consultations
info.realestateinvestar.com.au/leeandlee