Use your superannuation to buy real estate

Be on your way to retiring richer than you ever thought possible by taking greater control of how your money is invested in your Self Managed Super Fund (SMSF). Whether you’re planning for retirement or you’re a new or seasoned property investor looking for a better way to create and protect your wealth, our government has created an unprecedented opportunity for all Australians to dramatically grow their wealth.

A Self Managed Super Fund (SMSF) is a type of superannuation scheme that is set up to provide retirement income for the members of that fund. It is a trust in which the beneficiaries are also the members. In 2007, superannuation legislation changed to allow SMSF investors to purchase property through leveraged funds that are called “property bare trusts” or “custodian trusts”. This provided all Australians with a fantastic opportunity to bring their self funded early retirement closer, by either using the power of leveraging to purchase property or making a profit through rental income.

Most people who have an SMSF invest in either shares or property, as each of these investment types could outperform the other at different stages of the economic cycle. Here at Properties Invest Australia in Perth, WA, we specialise in the latter. While the setup and management of an SMSF can be a complex process, having the help of the right professionals and advisors will not only make things more straightforward for you, it will also ensure that everything is properly structured and legally compliant. Our winning combination of unique, carefully researched properties that are ideal for SMSF structures coupled with independent industry specialists who will advise our clients on strategy and finance make us the smart choice for our clients.

Australia as a whole has many good choices when it comes to SMSF properties, not just in Perth or WA. The key lies in utilising and understanding the market research for each state to find the best opportunities for your requirements. Don’t do it without the right experts behind you – Properties Invest Australia has a long history of supporting the superannuation industry with compliant and client friendly advice. Every SMSF that we have been involved in setting up has been successfully operating since the day of its inception – without exceptions. To find out how you can take control of your superannuation, start your investment property plan and discover how you can benefit personally, contact us and speak with one of our representatives.

Why should you invest in SMSF properties?

The compound effect of a leveraged property in your superannuation fund can greatly assist in growing your wealth. Its low tax rate allows you to retain a larger component of your ongoing revenue, thus providing you with a high yielding asset with a greater return. While this is also the case for fixed interest, property has the added benefit of capital growth, and the superannuation structure also has major tax benefits for retirement. By taking advantage of the minimal taxation structures in your SMSF and our well developed research methods of real estate investment, you will enjoy the benefits and tax concessions available both now and in the future.

Interested? All you need to get started is your existing superannuation fund. You can pay off your investment property using your employer’s super contributions and the rental income, and couples and families can also combine their superannuation balances into their own mega family SMSF. Furthermore, when you come to Properties Invest Australia in Perth, WA, you can rest assured knowing that the properties we provide you under our Corporate Real Estate license will match up with the advice given to you from an independent financial planner that is Australian Financial Services licensed to provide SMSF advice.

What are the main benefits of SMSF properties?

There are two main benefits to SMSF properties:

  1. You only pay 10% Capital Gains Tax (CGT) if held for more than 12 months, and no CGT if the fund is in pension phase.
  2. You only pay 15% tax when contributing (between $30,000 and $35,000 p.a.) to pay off your debt on your property through your SMSF, as opposed to your individual marginal tax rate if holding the asset outside of superannuation.

Other benefits include:

  • Super funds are taxed at 15%.
  • Deductible interest payments.
  • Direct property in Australia is a smart way of diversifying your investment portfolio.
  • The ability to invest in a National Rental Affordability Scheme (NRAS) property using an SMSF, with your superannuation fund receiving the incentive.
  • Individuals do not get into debt and the deposit is obtained from the current superannuation fund.
  • The SMSF is able to end the property bare trust and take ownership of the property at any time.
  • The SMSF’s other assets are protected from risk.
  • You can include family insurance policies and take advantage of estate planning benefits.