Purchasing residential property within your self-managed super fund (SMSF) can be an effective way to increase the value of your retirement savings and provide tax effective investment returns. Owning a residential investment property within your SMSF can be significantly more tax effective than investing in a property in your personal name.
During the initial consultation, our Buyer’s Agents will discuss your property requirements and provide a recommendation on where and what to buy based on your budget and individual requirements.
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 Agents secure you a great investment property.
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.
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.
There is a lot to consider when creating a SMSF investment strategy. Our professional advisers make sure you purchase the right ‘investment grade’ property for your SMSF.
Start by booking a free initial consultation with our expert team today.