More and more Australians are seeing the advantages in not only establishing their own Self-Managed Super Fund (SMSF), but also in using their SMSF to invest in property. The obvious benefit to this option is that you can use your super to a higher advantage to set yourself up for retirement. Where with conventional super funds you may remain unengaged and allow a third party to manage your investments, having an SMSF enables you to actively engage with your super funds, invest your own money, and control the future of your retirement funds.
SMSFs can be used to purchase property with borrowed funds. If you have 1/3 of the total property cost, you can deposit that sum and use it to leverage the remainder from a trusted bank or loan provider. At a time when the share market is volatile, using superannuation to buy property is a welcome alternative. Property presents a much more secure opportunity to create a stable and earlier retirement for yourself. Property is also a more attractive investment option for lenders because it does not have a value that fluctuates as much as the share market, and because property simply gears better. If you happen to be one of the many who believes that property will be your super, you will benefit more from using superannuation to buy property. Using superannuation to buy property means you will only pay 15% of tax rather than up to 46.5% of the tax you pay outside of super.
You can experience the joy of a stable, early retirement by using your SMSF to purchase either commercial or residential property, with distinct rules applying to each. You incur no out-of-pocket expenses for holding the property and any shortfall is paid for by your SMSF. After holding the property for more than 12 months, the 15% tax that you pay drops to an even lower 10%. And you pay no Capital Gains Tax (CGT) if the property is sold in the pension phase. SMSFs have become increasingly popular with people who want to manage their retirement money; it offers you the power to have control over your financial future through self-funded means.
It is however, important to keep in mind that even though using superannuation to buy property through your SMSF is a viable retirement option, there are always pitfalls and risks that come with investing with your super funds in any capacity, and you should always seek out advice according to your personal circumstances to give the highest and safest return possible. An SMSF is a responsibility that should be adopted by those dedicated to following SMSF guidelines and those that have the time and knowledge to do so. Executed effectively, using superannuation to buy property can pave the way for the comfortable, early retirement you’ve always wanted but was never possible until now.
If you are thinking of using superannuation to buy property, then you will benefit from the advice and services of Super Alchemy. Learn to improve your super quickly and safely and establish a secure and comfortable retirement.
SMSFs can be used to purchase property with borrowed funds. If you have 1/3 of the total property cost, you can deposit that sum and use it to leverage the remainder from a trusted bank or loan provider. At a time when the share market is volatile, using superannuation to buy property is a welcome alternative. Property presents a much more secure opportunity to create a stable and earlier retirement for yourself. Property is also a more attractive investment option for lenders because it does not have a value that fluctuates as much as the share market, and because property simply gears better. If you happen to be one of the many who believes that property will be your super, you will benefit more from using superannuation to buy property. Using superannuation to buy property means you will only pay 15% of tax rather than up to 46.5% of the tax you pay outside of super.
You can experience the joy of a stable, early retirement by using your SMSF to purchase either commercial or residential property, with distinct rules applying to each. You incur no out-of-pocket expenses for holding the property and any shortfall is paid for by your SMSF. After holding the property for more than 12 months, the 15% tax that you pay drops to an even lower 10%. And you pay no Capital Gains Tax (CGT) if the property is sold in the pension phase. SMSFs have become increasingly popular with people who want to manage their retirement money; it offers you the power to have control over your financial future through self-funded means.
It is however, important to keep in mind that even though using superannuation to buy property through your SMSF is a viable retirement option, there are always pitfalls and risks that come with investing with your super funds in any capacity, and you should always seek out advice according to your personal circumstances to give the highest and safest return possible. An SMSF is a responsibility that should be adopted by those dedicated to following SMSF guidelines and those that have the time and knowledge to do so. Executed effectively, using superannuation to buy property can pave the way for the comfortable, early retirement you’ve always wanted but was never possible until now.
If you are thinking of using superannuation to buy property, then you will benefit from the advice and services of Super Alchemy. Learn to improve your super quickly and safely and establish a secure and comfortable retirement.
Filed under News by on Feb 14th, 2012. 