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Elevate Your Future With A Smsf Property

We listened when Australians said the SMSF process was complex and expensive! Our Self Managed Super Fund specialists take the stress out of setting up a self managed super fund and other asset investing by guiding you step by step through the process, whilst offering affordable application and running costs along the way. It is important to note that all fees below are taken from your current retail superannuation fund.
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Need to Know - SMSF and Property

Benefits of Buying a property with a SMSF include:

1. Concessional tax on rental income

When you own an investment property in your own name, the tax will be payable based on your personal rate of tax, which could be as high as 46.5%. However, due to the concessional tax rate that applies to superannuation investment earnings, rent received by your SMSF property will be taxed at a maximum rate of 15%! Additionally, certain expenses related to the ownership of the property such as land rates, property maintenance etc will generally be tax deductible to the fund – resulting in the tax rate potentially coming down further.

2. Concessional tax on future capital gains

Special superannuation tax rates also apply to any capital gain made as a result of an increase in your SMSF property value. As a result, depending on when you decide to sell the property, any capital gain your SMSF property may be completely tax-free. To summarise:
  • If you sell the property while still in the “accumulation” phase, the fund will generally pay CGT of up to 10% on any growth in the property value assuming that the property has been owned for at least 12 months)
  • On the other hand, if you decide to sell the property after you have transferred it into the “pension” phase, within your SMSF, any capital gain will be exempt from tax altogether!

3. Increased superannuation opportunities with SMSF property

In addition to the above, where the property owned by your SMSF is the property from which you run our own business, superannuation rules require your business to pay a commercial rate of rent to the fund – providing you with a way to accelerate your superannuation savings. The rent that your business pays into your SMSF will be tax deductible to your business, but more importantly for superannuation purposes, it will not be treated as a superannuation contribution.

Because the tax benefits available on superannuation contributions are currently limited to $25,000 a year, or $35,000 if you are aged 59 and over , the ability to make tax deductible rent payments into your superannuation fund – without this rent counting towards these limits – enables you to build your retirement benefits quicker and tax efficiently.

What’s involved with purchasing property with SMSF?

A self-managed super fund is a way of saving for your retirement. When managing your own super fund, you must ensure you are responsible for complying with the super and tax laws. When looking to use a SMSF to purchase property, it’s important to understand all the SMSF property rules and conditions associated. It’s important to understand that buying a property with your SMSF is that it can only be used for investing in property. While you can use your SMSF to buy property and take out a home loan, it’s recommended to speak with a Mortgage broker and seek advice from a qualified accountant or tax agent before proceeding.
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Using SMSF to buy property

When buying a property with your SMSF you must ensure you comply with the SMSF property rules set out by the ATO. The general SMSF property investments rules include:
  • The SMSF property must meet the ‘sole purpose test’ of solely providing retirement benefits to fund members.
  • The SMSF property purchased must not be from a related party of a fund member.
  • The property can not be lived in or rented by a fund member or any related parties of a fund member.
  • If purchasing a commercial property, it can be leased to a fund member or related parties of a fund member for their business – as long as it is solely used for business purposes. However, it must be leased at the market rate and follow specific rules.
Setting up a Self-managed super fund (SMSF) and investing in property is a great way to plan for your retirement. However, it can be tricky to know without the necessary knowledge or experience.

That’s why we’re here to help! Our team of experts and SMSF Accountants at New Venture Wealth are here to assist you in applying for your SMSF ,getting your SMSF up and running whilst ensuring your fund is adhering to ATO regulations.

Our services include setting up your SMSF set up, completion of all your annual tax requirements by our team of chartered accountants (inclusive of an independent audit) ensuring your SMSF property adheres to all ATO regulations. We also specialise in investing your SMSF in crypto so you can focus on whatever avenue is most important to you!

FAQ'S

Yes, your SMSF can borrow to purchase Residential Property if it meets the strict rules set by the ATO. We strongly recommend that you seek professional advice from a qualified financial advisor when considering whether this is a suitable option for your fund.

Interest rates and fees for borrowing to purchase Residential Property through an SMSF will vary depending on the lender. You must understand all the terms and conditions associated with any loan, as the suitable lenders for SMSF residential property loans are specific and not all major banks offer SMSF loans.

The LVR restrictions limit the amount your SMSF can borrow to purchase residential property. Generally, an SMSF may borrow up to 80% of the property value for established houses and townhouses; however, a reduced LVR may apply for apartments, newly established properties or some locations.

Yes, your SMSF can borrow to purchase Commercial Property if it meets the strict rules set by the ATO. We strongly recommend that you seek professional advice from some reputed financial advisors when considering whether this is a suitable option for your fund.
Actually, your SMSF is optional to use a specific lender when borrowing to purchase non-commercial state residential – though you must shop around and compare different lenders to get the best rates and fees.
Yes, your SMSF can borrow to purchase Land if it meets the strict rules set by the ATO. We strongly recommend you consult a qualified financial advisor when considering whether this is a suitable option for your fund.

Yes, your SMSF can borrow to subdivide if it meets the strict rules set by the ATO. We strongly recommend that you seek professional advice from a financial advisor when considering whether this is a suitable option for your fund.

Yes, lenders’ mortgage insurance is usually payable when your SMSF borrows to purchase Property. The cost of this will vary depending on the lender and other factors such as loan amount, loan type, and property type.

To discuss your options with a SMSF expert or Chartered Accountant book in your free consultation here.

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We provide a FREE 30 minute online SMSF consultation to help you discover how to set up a self managed super fund.

Book in a time for your free SMSF Consult with one of our account managers who will be happy to answer any queries you have about setting up your new SMSF
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New Venture Wealth are SMSF Specialists and Chartered accountants. We are not financial advisors and no content on this website should be considered as financial advice

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