Using a Self-Managed Super Fund (SMSF) to invest in property has gained significant attention in recent times. This approach to property investment offers several distinct advantages that can empower individuals to secure their financial future effectively. Here are five key points to consider when buying property using an SMSF:
1. Strategic Diversification:
Incorporating property investments within your SMSF portfolio allows you to diversify your holdings beyond traditional assets like stocks and bonds. This diversification can help manage risk and potentially enhance your overall returns.
2. Tax Efficiency:
Utilizing an SMSF for property purchases can offer attractive tax benefits. Capital gains and rental income generated from the property can be taxed at a lower rate within the fund, potentially leading to higher after-tax returns compared to investing outside of super.
3. Control and Flexibility:
One of the most significant advantages of an SMSF is the control and flexibility it provides. Investors have a say in the property selection process, allowing them to align investments with their long-term goals and risk tolerance.
4. Asset Growth and Retirement Planning:
Property investments can contribute to long-term asset growth, ultimately enhancing the SMSF’s value for retirement. A well-chosen property could serve as a consistent income stream during retirement years.
5. Property Leverage:
Borrowing within an SMSF to invest in property, known as Limited Recourse Borrowing Arrangements (LRBAs), can amplify your investment potential. While there are strict regulations to adhere to, this strategy allows you to utilize leverage within the superannuation structure.
Using a SMSF to invest in property is a very attractive opportunity for many Australians. The structures and compliance does require the expertise of an accountant, financial planner and finance broker. We have a close connection with these trusted partners who can help you take the necessary steps to use your SMSF to invest in property.
What to do next?
At Crest Property Investments we specialise in sourcing brand new and off the plan properties for buyers. If you’d like to learn more about property investment, including the purchase of for a SMSF, please feel free to look us up on our website.
Our YouTube channel and Market Insights also provide a wealth of information to assist you with many areas relating to property.
While we have taken care to ensure the information above is true and correct at the time of publication, changes in circumstances and legislation after the displayed date may impact the accuracy of this article. If you want to learn more, please contact us. We welcome the opportunity to assist you.
January 2024
