Buying Property with Your Self-Managed Super Fund
SMSF stands for Self Managed Superfund, which is a private fund that you manage yourself. The money that would normally go into an industry or retail Superfund, would go into the SMSF instead. This allows you to choose the investment you want. If your ready to maximise your contributions, we will find the perfect investment strategy for you based on your individual or combined needs.
The goal of your SMSF is to maximise your retirement funds and secure your future. An SMSF allows a trustee to consolidate the super asset of up to six members (usually family members or business partners) into one larger pool of funds, which increases your investment opportunities.
Buying property with your SMSF allows you to build up your retirement fund rapidly and tax effectively. The benefits include:
Buying property with your SMSF allows you to build up your retirement fund rapidly and tax effectively. The benefits include:
Nu Wealth understands that if this is new to you, it may be a lot to take in and be quite overwhelming , we specialise in property investment and we suggests investors get specific advice from a qualified accountant before embarking on an SMSF journey, that will allow you to gain insight to the key benefits of building a property portfolio through a super fund. There are many further considerations when it comes to buying a property with your SMSF the amount of tax you pay on rental income from the property and capital gains tax can change over time, and it is vital to be across laws such as these. Therefore, engaging a SMSF compliant accountant will be game-changer. The goal of your SMSF is to maximise your retirement funds and secure your future.
A property bought with your SMSF must only be used for investment purposes. Therefore, if you invest in a residential property with the SMSF, it cannot be lived in by the trustees of the SMSF or anyone related to them. (I.e. if you buy a house with your SMSF, you can’t rent it to a family member, and you can’t purchase a holiday home to live in part-time.)
Also, residential properties already owned by the trustees cannot be put into the SMSF or purchased by the fund. However, a commercial property (a premises for a business) can be sold to a self-managed super fund by its trustees. Unlike residential property, it can be leased to SMSF individual trustees, their businesses, and relatives. The rent must be set at the current market rate, and no “mates rates” can be given to the tenant.
At the end of the day, the property investment (whether residential or commercial) must function as a means to provide retirement benefits for the trustees and members. It is also important to note that if the property makes a loss, the tax losses cannot be offset against the personal tax of the trustees.
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