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Self-Managed Super Funds

Buying Property with a self-managed super fund doesn’t have to be complicated…

Purchasing residential or commercial property within your self-managed super fund (SMSF) can be an extremely effective way to increase the value of your retirement savings and provide tax effective investment returns.

There are many areas that need to be considered when buying property through a SMSF and you must ensure you are complying with the rules. We can provide you with a number of qualified professionals that can handle all areas of establishing and maintaining your SMSF while our expert Buyer’s Advocates and real estate consultants secure you a great investment property.

Must meet the 'sole purpose test' of solely providing retirement benefits to fund members.

Must not be acquired from a related party of a member.

Must not be lived in by a fund member or any fund members' related parties.

Must not be rented by a fund member or any fund members' related parties.

SMSF Borrowing

Many people still believe that you cannot borrow or gear a property in a SMSF however the rules have changed and you can borrow under a ‘limited recourse borrowing arrangement’.

A limited recourse borrowing arrangement can only be used to purchase a single asset, for example a residential or commercial property. 

Tax advantages of investing through your SMSF

The major benefit to owning property within your SMSF is the tax advantages you receive. The maximum rate of tax your SMSF will pay on the rental income is 15%. And if your SMSF is in the pension phase, this rate reduces to 0%.  When comparing this to a property held personally where the rental income is taxed at your marginal tax rate, this can offer significantly tax savings, especially if your tax rate is as high as 46.5% (including Medicare levy).

Another advantage is that if your SMSF holds the property for more than 12 months, any capital gain made on the sale of the investment property will be taxed at a maximum rate of 10%, or again, 0% if the SMSF is in pension phase. If you want to take more control of your retirement savings and purchase residential and commercial property using your superannuation funds, contact our office now.