WHY PURCHASE A PROPERTY IN A SELF-MANAGED SUPER FUND?
People generally set up a Self-Managed Superannuation Fund because they like the sense of freedom and the opportunity to control their own affairs. The Self-Managed Superannuation environment provides this. They generally use the fund as one part of an integrated strategy to build assets that will provide their retirement income as well as using the structure to effectively manage that income during retirement.
Now with SMSFs having the ability to borrow, it is possible to invest in quality residential property and gain the stability and solid returns which property can offer. Couples can combine their super to fund the deposit or increase their borrowing capacity.
A SMSF enables you to:
- Control your super and have it invested in an asset you understand.
- Save your personal cash flow.
- Use your existing super fund balance to fund the deposit.
- Pay off the property using your employer’s 9% super contributions and the rental income received from the property.
- Pay no capital gains tax if the property is sold in the pension phase after age 55.
- For those aged under 55 only, pay 10% capital gains tax if the fund sells the property.
- If you make additional contributions through the fund or receive any rental income, pay tax at a maximum rate of 15% instead of your full marginal rate which can be up to 46.5%.
- Take advantage of the proven returns from real estate, helping you grow your super.
- Enjoy consistent rental return from your property investment.
- Tailor your investment strategy to meet your requirements.
- Have assets inside the fund that may offer asset protection benefits.
WHO CAN INVEST?
You can invest in property through a self-managed super fund whether you are employed or self-employed. You can also choose to invest as an individual or as a couple to enable you to pool your existing superannuation balances.