Funding property investment in Australia with your Self Managed Super Fund (SMSF)
In September 2007 the new Superannuation rulings allowed SMSF to invest into a trust structure to borrow investment money for property purchases; prior to this SMSF were not allowed to borrow for investment purposes.
So what are the benefits of SMSF Geared Property Investment in Australia?;
• Taxed at only 15% on contribution to SMSF,
• No capital gains tax at 60 years of age compared to outside investment when selling property (through an approved Pension Plan)
• Profits taxed at only 15% within the fund,
• Enable a diversification of wealth creation strategies within your SMSF.
I recently met with Ray Jamieson of Allied Financial Planning P/L to learn more about this opportunity and the requirements to make it possible.
Although Allied Financial Planning P/L (AFP) can help with all of the arrangements, the following applies no matter who assists in the management of your SMSF;
• The loan must comply with the ATO & SIS Act rulings, or your fund could become non-compliant.
• Your Superannuation Guarantee (SG) from your employer and rental income from the property should cover loan repayments. A small Salary Sacrifice may be required in some cases.
• The loan is limited recourse to the property purchased; this means that other assets of the SMSF or the Trustees of the Fund are not at risk in any way.
• At the time of retirement, you have the choice to pay out the loan, sell the property or continue to receive rental income from the property.
If you have any detailed queries, please contact Ray or a member of his team on 07 5592 4423 or 1300 306 177 alternatively see their websites www.afplanning.net or www.unlockyoursuper.com.au – remember to let us know your questions and the answers they provide for you.
Happy Investing
Filed Under: Interest Rates • Investment Strategies • Property Investment • Property Investment Tips • Property News • Renovations
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