There are a variety of reasons why you might want to have yourself declared a "self employed" person running a property investment and management business. Major reasons include, among other things, being able to claim a tax deduction for personal superannuation contributions. Also, you may wish to contribute to super but since you've not been working for a number of years you are not otherwise eligible to contribute.

Being able to contribute to super as a property investor and claim a tax deduction could be useful because in your later years prior to your official retirement you may wish to start selling properties and put the proceeds into superannuation to draw as an allocated pension. The tax deduction you claim for super contributions would go a long way toward reducing the capital gains tax liability from the sale.

Superannuation contributions are tax deductible under a few circumstances but the major rule is that income from superannuation supported employment must be less than 10% of your total income for the year. If you have a huge capital gain from selling properties then possibly you may satisfy the 10% rule if your other income isn't much, but unless you are considered employed or self employed you may not be entitled to contribute to super in the first place.

(The rules of super contributions and preservation are given more attention in the financial planning FAQ under superannuation.)

I often get asked by people who manage several properties whether their property management could be considered gainful employment (as opposed to passive investment), so they would be entitled to contribute to super.

The question is a bit complex and you may wish to talk to an adviser or accountant to get more specific advice relating to your individual circumstances, but the following generally are true:

• You'll have difficulty calling yourself a self employed property manager if you only own one property. If you own several you are in a better position to argue self employment.

• If you use a property manager like a real estate agent, you'll almost certainly be considered a passive investor, even if you do some work from time to time.

• If you carry out extra services like mowing the lawn each week, you are in a better position to argue self employment, but from a paperwork point of view it would be best if you invoiced tenants $200 per week plus $10 mowing and maintenance fee rather than $210 a week in rent.

• Number of hours spent managing the properties will be considered.

• The professionalism of your operation will also be considered, including how well organised is your administration and accounting and banking details etc.

• You can get a ruling from the tax office for free if you aren't sure.