Testimonials


I had no idea where my lost super was or the names of the funds. I just new it was scattered everywhere and I should definitely have more than $3,000 in my super. Australian Super Finder found all 7 of my funds and now my balance is almost $50,000. Thank you so much for getting my super back on track. ? Leonie, Thomastown VIC


Super Facts and Tips

Borrowing Property within SMSF

It has grabbed a few media headlines.

However, direct property investment inside self-managed super funds and the use of gearing to enable it is not right for everyone. It's a strategy that requires careful consideration and good financial, tax and legal advice. For example, superannuation laws play considerable restrictions on how property can be used, if a borrowing arrangement is in place.

Self-Managed Super Fund Tips

Australians love residential property more than any other investment class as the one you can see and feel. Without carriage risk, just like any other investment, sometimes it just seems like a more comfortable feat. As of September of 2013, $ 18.6 billion of SMSF money was estimated to be tied up to residential property.

It's important to know the regulations around such property within an SMSF as they are different to those related to the purchases of real estate property, or more commonly called commercial property. Here's a guide to help you through.

Why Invest in Residential Property inside SMSF?

Inside or outside SMSF, it doesn't make a difference. It depends on the situation. Inside an SMSF, it's a far better tax environment. However, it comes with plenty of restrictions on who you can acquire the property from and what you can do with a property depending on whether the property is geared or not. Outside SMSF, investment income property is taxed at an individual marginal tax rate. However inside SMSF, it is taxed at 15% if you are in the accumulation phase.

If you have commenced an eligible pension, it won't be taxed at all. Net capital gains outside your super are also taxed at your individual marginal tax rate. However, inside SMSF, it's 15%. If you've held the property for less than a year, 10% of your owned property for more than 12 months. Or 0% if you're in pension phase.

What's the Catch?

As far as making an investment, you have to remember you can't derive a benefit from this investment before retirement. Importantly, you can't use the property yourself or rent it or lend it out to friends and family when it's inside your SMSF. Remember that the major purpose of having an SMSF is to provide for your retirement, not your current lifestyle.

More details on borrowing a property with SMSF can be found on our website at www.australiansuperfinder.com.au

All information on this website is of a general nature only. We have not taken into account your financial situation, needs or objectives. You need to make up your own mind and ascertain yourself if it is right for you. We recommend you read the product disclosure statement(s) and the financial services guide before making any financial decision.

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