Self-managed Super Fund

Buying property with your Self-managed Super Fund

If you are looking to invest in a property with the sole purpose of providing retirement benefits, you can do that with a Self-managed super fund also known as SMSF.

What Is An SMSF?

Self-managed super funds (SMSFs) are a way of saving for your retirement, they are also an alternative for those who may want to manage their superannuation themselves.
The difference between an SMSF and other types of funds is that the members of an SMSF are usually also the trustees. This means the members of the SMSF run it for their benefit and are responsible for complying with the super and tax laws.

Retirement Benefits

An SMSF must be run for the sole purpose of providing retirement benefits for the members. Additionally, all decisions you make as trustees of your SMSF must be in the best financial interests of the members.

One of the benefits that Self Managed Super Funds have is the ability for you to purchase property solely to provide retirement benefits to fund members.

Requirements For Property Purchase

In order to purchase a property, the deposit required for a self- managed super fund is 30% of the property’s value. The deposit and cost to purchase the property will come from your super balance.

The ability to repay the loans is assessed through members’ contributions, in some cases the rental income from a property can also be counted in the fund’s ability to make repayments.

Refinancing your SMSF loan

If you have an SMSF loan with an existing lender such as ANZ, CBA, NAB Or WESTPAC or you have not refinanced in the last two to three years, you are most likely paying too much on your interest rate.

We recently just helped a client to refinance their SMSF loan from a 8% down to a low 6%, so do contact us here.

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Consult a Financial Planner

Please note that everything written in this blog is general advice only and if you are looking to set up an SMSF, please consult your Financial Planners who specialise in SMSF to help you make an informed decision about whether an SMSF is right for you.

In terms of compliance, a licensed financial planner can help you to understand the penalties for SMSF non-compliance and to advice if this structure is suitable to your financial needs.

I hope our tips have been helpful and you’ve learned a few things about using your super fund to purchase a property.

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