Brighter Buying

Can you buy property through your super?

by Karleen Jentz, Copywriter 6 July 2016

Depending on your age and stage retirement might rate highly on your radar, or not at all.

But the experts are agreed: the sooner you start planning for retirement the better off you’ll be financially.

Buying property through self-managed super funds (SMSF) has become increasingly popular since 2007 when the rules changed to allow borrowing inside superannuation.

It’s not a strategy that will suit everyone and you should definitely consult your financial advisor before diving in. Here are a few points you’ll need to consider.

  • You will first need to establish a SMSF and buy property through your fund.
  • Income from your SMSF is generally taxed at a concessional rate of 15 per cent – this includes rental income from property held in your fund.
  • Banks will typically lend less to a SMSF than to an individual buyer.
  • Loan repayments must be made from your SMSF so you need sufficient cash in the fund to meet the repayments.
  • You can’t purchase a property through SMSF to use as a holiday house or rent to a family member.
  • You can purchase your business premises through your SMSF allowing you to pay rent directly to your fund at the market rate.

Check out the MoneySmart website for more information.

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