Purchasing property through your Self-Managed Super Fund could be one of the best investments you ever make. At Nitschke Nancarrow, we walk you through the process to ensure you make the wisest decision.
There’s an increasing number of properties purchased through Self-Managed Super Funds (SMSFs). Why are people going down this route? And should you get on board with this trend?
Purchase Property Through Your SMSF – Why?
What are the benefits of purchasing property through your SMSF?
A property within an SMSF will be taxed at only 15%. That’s lower than most personal tax rates out there. Additionally, selling a property while your fund is still in its accumulation phase means that the capital gains tax will be calculated at a lower rate. Selling a property in the pension phase is tax-free.
What is the basic point of purchasing property through a Self-Managed Super Fund, anyway?
The bottom line is that acquiring a property within your SMSF is just another way to make an investment that could pay off in the future. It’s another means of packing your nest egg for a comfortable lifestyle long after retirement.
Limitations of Purchasing Property Inside Your SMSF
Purchasing property to support your SMSF is not the same process as regular property purchasing.
A few things to consider:
– Neither you nor any other family member can live in the property
– The property must provide retirement benefits exclusively to fund members
– You cannot acquire a property from the relative of a fund member
– Neither fund members nor anyone related to a fund member can live in or rent the property
Is this the right investment for you?
Despite the aforementioned limitations, many Australian investors have benefited from purchasing property through their SMSF. The entire objective of the investment is to see your Super Fund make a significant gain. But how can you know for sure what is allowable in your situation?
As you contemplate a property for potential purchase, ask yourself:
– Is this a good investment for me?
– What are the risks specific to my personal situation?
– How will the property value potentially change?
It is crucial to seek expert advice. A seasoned financial expert will help you make an accurate assessment of a property and carefully determine how your Self-Managed Super Fund can be impacted by such an acquisition. Professional advice will help you navigate these complex waters with ease.
Curious to know whether purchasing a property through your SMSF is right for you? Talk with an accounting expert at Nitschke Nancarrow today by calling on (08) 8379 9950. If you prefer, simply send me an email.
– Kym Nitschke