Buying Property through your Super ?

Buying property through your Super?

Property is the most trusted asset class for Australians, yet only around 3.5% of all SMSF investment is in residential property according to the latest ABS report (www.ato.gov.au/Super/Self-managed-super-funds).

Property investment can produce a range of tax benefits, for e.g. your tax can be significantly reduced or eliminated for rental income and capital gains, and the rental return can be used for loan repayments.

Do you need an SMSF to buy property through your super?
You do, that is if you want to choose which property you invest in anyway. Contact us today for a FREE 30 min SMSF consult and we can help you get started.

Are you in business?
Business owners can get some significant benefits when buying their commercial premises through their super. Along with all of the tax benefits mentioned above you also avoid the tenant or landlord issues that are often associated with commercial property. This is great, as buying your own business property still satisfies the ‘sole purpose’ test which is discussed under ‘what are the rules’ that follows.

Can you borrow money when buying property through super?
You CAN. Often banks will lend up to 80% for a residential property and 70% for commercial property loans through your SMSF. This is an example of leveraging the bank’s money to increase your investment.

What are the rules?
There are significant and strict rules around property investing through your super, according to moneysmart.gov.au the property must comply with these 4 key rules:

1. The property must pass the ‘sole purpose test’ – this means that the property must provide benefit solely to the SMSF fund member’s retirement. It’s the same as investing in art through your SMSF, you must keep that art in storage until you retire so that you don’t get any pleasure from it before that time.
2. You cannot buy or acquire the property from a family member
3. Neither you or your family members can live in the property
4. Neither you or your family members rent the property. Basically, it’s off limits to you and your family members. It is an investment property for your SMSF only.

Tips and Traps
If you’re happy with (or can at least manage) the restrictions you need to consider if you’re ready for this. Like any major financial decision jumping in means that you take on more responsibility. You should also consider if you’re better off buying the property outside of your super fund. Although the tax benefits can be great and borrowing money for your super-fund can be an extremely well leveraged strategy, the negative gearing benefits could be negligible. Therefore positively geared properties are often a good option for your SMSF. In short – make sure you do your research and consult an expert.

The bottom line
There can be some MASSIVE benefits of buying investment property through your SMSF, by borrowing money you are increasing your investment which can yield great results over time. There are also options to secure your loan to protect your other assets in the fund. These investment and asset protection strategies are things you really should spend time researching and talking through with your advisor. We specialise in SMSFs and would LOVE to talk to you about your options.

Free SMSF Consultation – Book NOW
To assist you to make an informed decision, contact us TODAY on
(07) 3285 1388 for a FREE 30 minute consultation. We can clearly explain, using our exclusive SMSF Comparison Report, the benefits of a SMSF and whether or not a SMSF is the right thing for you.
Don’t delay. The sooner you get started with the right advice, the sooner you will grow your assets to have a better financial future! PETER DI TOMMASO CHARTERED ACCOUNTANTS
821 Gympie Road
Lawnton Q 4501
P: (07) 3285 1388
Email: peter@ditommaso.com.au

Protect yourself from making emotional financial decisions

Who will PROTECT you from your emotional decisions?
We all do it, we make irrational decisions based on emotion. So how can we protect ourselves from, well, ourselves?
It is SO important to have someone watching your financial back. To look at the big picture and give you sound advice on the market. This could protect you from irrational decisions (more like reactions) to random short term swings in the market. Or investment decisions made on pretty names.
Want to BOOST your net worth? Get an advisor
Long term studies show that there is a strong positive correlation between the use of a professional advisor and subsequent net worth. What’s more interesting is that the significance is stronger for those who have used an advisor for 10 years or more.
Going steady with your advisor
Choosing a professional financial advisor is a big decision and should be treated as such. You should view this as a long term business relationship for your personal wealth. No one will care more about the outcome than you, however, you need a professional to bring you the facts without the emotion.
I say this should be a long term relationship as you may not see the real benefits in the first year. It may take several years for the true benefits to shine through. So it’s important to pick an advisor and stick with them.
What if I back the wrong horse?
Although you should take your time in choosing your advisor and then stick with them, this doesn’t mean that their performance shouldn’t be reviewed regularly. Agree on a long term plan upfront and then review it regularly. Stipulate some KPI’s that you need to achieve, and ask your advisor what they think they need to achieve for you. Write ALL of this down and use it as an agenda for your reviews.
Who’s on YOUR side?
As your wealth grows it will pay to have a team that you can rely on, an advisor, accountants and in some cases solicitors.
Peter Di Tommaso Chartered Accountants take a team approach: we have a team of accountants, financial planners, loans and leasing experts as well as our support team all going in to bat for YOU. This gives you peace of mind in knowing that there is no ‘single-point-of-failure’ you have a team of people working for you and we use the latest software to track and ensure all of your projects are progressing as expected. PLUS with so many of us we’re always quick to respond whenever you need.

PETER DI TOMMASO CHARTERED ACCOUNTANTS
821 Gympie Road, Lawnton Q 4501 | P: (07) 3285 1388
Email: peter@ditommaso.com.au

79 queries in 0.288133 seconds.