In the past ten years superfunds have underperformed in many instances – especially those of us with a heavy gearing towards international markets. If you are looking to take back a little control then a Self Managed Super Fund (SMSF) is a viable option.
SMSFs are a tried and true investment structure for one million Australians. In fact, the SMSF sector is the biggest and fastest growing sector in the Australian superannuation industry, taking a 32% market share, valued at around $500 billion and growing.
There are many asset classes to look at with SMSF – talk to your financial planner or accountant! One of these – especially for diversification – is property investment.
There are many significant advantages in purchasing investment property through your SMSF such as:
- The SMSF taxation rate is less than your personal tax rate. Before retirement phase, capital gains are taxed at only 15%, or 10% if you have held the property for more than a year
- Upon retirement age you pay no tax on either the capital gains or the income from the property
- Capital gains tax is not payable if the money stays in your fund
- You get diversification in your Super portfolio.
However, as is usually the case, there are some disadvantages that you need to be aware of as well, these are:
- Neither you nor related parties may live in the property
- You can’t renovate the property while it is under a loan
- Set-up costs can be high and there are usually slightly higher interest rates involved in getting a loan through your SMSF
- You cannot leverage the property within the fund
- Most lenders will require you to have 20 – 30% deposit before they will lend to a SMSF for property
Dwyer Property Investments specialise in providing property suitable for purchases within SMSF’s.
There is a selection of properties already built and being built including upmarket waterfront display homes, dual occupancy dual income dwellings with fantastic rental yield to smaller entry level investments for under $450,000.
We have properties which cater to your SMSF investment needs.
Contact us to find out more about property investment within your SMSF or simply to discuss whether to convert your Superannuation into a Self Managed Super Fund to take advantage of property investment.
These high growth, single contract, new properties, are all suitable for SMSF purchases: