Many people with funds in superannuation have been enjoying the freedom of choosing how those funds are invested through self managed super funds.
With the advent of the self managed superfund (SMSF), managing your retirement funds is now fairly common as people shun large corporate public funds and opt to control their nest egg themselves.
There are significant rules and regulations in place to govern the management of your superannuation in order to protect your retirement savings. Until relatively recently for instance it was not possible for a superfund to borrow funds for investment purposes. This ban has now been lifted self managed superfunds, are able to borrow money to directly via SMSF Loans to purchase real estate or shares in order to further the investment portfolio of the fund.
There are still some restrictions in place in structuring these transactions for example; specific entities need to be established in order to facilitate the borrowing/ownership of the assets. Plus there are complex issues involved in relation to stamp duty and capital gains tax and the loan products available. So it is important to speak to expert legal and accounting advisers as well as to mortgage brokers experienced in Self Managed Super Funds and SMSF Loans.
The benefits of using your superannuation funds and SMSF Loans to invest in Real Estate can be great. Wouldn’t you like to be paying off an investment property with the 9.5% super payments your employer makes on your behalf?
Please give us a call to talk over your situation, or fill in our free quote form and receive an obligation free loan assessment and see if you could be enjoying the benefits of investing with SMSF loans.
For further information about how you can dramatically increase the value of your superannuation using property investment strategies contact us today!
If you are looking to grow your wealth by purchasing an investment property using a SMSF Loan, contact us today and one of our SMSF Lending Specialists will tailor a Loan Proposal to suit your needs.[/dt_call_to_action][dt_contact_form fields=”name,email,telephone” required=”name,email” button_title=”Enquire Now!” button_size=”big”]
SMSF Tax Benefits when Investing in Property
- If you buy a property with your super fund and hold the property until after you retire and your super goes into the pension phase, you pay no tax on either the capital gains if you sell or the rent if you continue to hold your investment.
- Before retirement, capital gains and rent earned by your SMSF are taxed at only 15 percent (if you hold the property for more than a year, this drops to 10 per cent on capital gains).
- Direct control of your super investments and a real understanding of where your money is invested.
- Diversification in your portfolio.
- If you borrow to buy property through your super and you’re negatively geared, the tax offset only applies to other income earned within the fund – not your regular income.
- You can’t live in the property and neither can any friends or family members.
You can’t renovate a property purchased through a SMSF while it is still under a loan.
- Running a SMSF can be complicated and penalties for getting things wrong are high. However, you can pay a professional to run it for you.
- Buying property through a SMSF is generally only suitable for funds with $150-$200,000 in the fund.