Is it worth buying property through SMSF?

There are several rules you need to comply with to buy a property through your SMSF. The property must:

• Not be obtained from a relative of a member
• Not be resided in by a member of the fund or a member’s related parties
• Not be rented by a member of the fund or any of their related parties
• Pass the ‘sole purpose test’ of only providing fund members with retirement benefits

If you choose to purchase a property through an SMSF, the fund must be used to pay 15% tax on the property’s rental income. For properties owned over a year, the fund will benefit from a third discount on any capital gain it makes after selling, reducing your capital gains tax liability to 10%.

If investing your retirement savings in an investment property is appealing to you but you don’t have enough saved in your super to do this, SMSF Borrowing could be the perfect solution. As long as you meet the conditions listed above, you can use your SMSF to invest in property under a Limited Recourse Borrowing Arrangement (LRBA).

Using an SMSF can increase your property investment options significantly. You will also pay fewer Capital Gains Tax (10%), have the chance to speed up the growth of your retirement savings and be able to maximise your capital growth, as you can use your rental income to fund further property investment.

ARE YOUR READY TO INVEST? 

If you have decided you want to purchase a property within you SMSF or would like to refinance an existing loan, please click the 'Start Here' button below, this will take you to our online Fact-find platform in which you can fill out your details.

We will connect with you within 1 business day to confirm and discuss the next steps.