GST

Registering for GST may be required for your SMSF, depending on the nature of the property purchased and how you will be using the property. If the annual commercial rental will be $75,000 or more, then your fund will be required to be registered for GST. If the rent is less, then the GST registration is optional. Professional advice needs to be sought prior to purchase to determine if GST registration is required.

Capital Gains Tax (CGT)

When the SMSF sells the property, a rate of 15% tax will apply to the capital gain unless the fund has owned the property for 12 months or more, in which case the rate will be discounted by 1/3 resulting in a tax rate of 10%. If you wait until you retire and commence a pension in your SMSF before selling the property, the tax rate could be as low as 0%.

Land Tax

A super fund is entitled to a land tax threshold; this means that a SMSF can hold up to $755,000 of land and pay no land tax. Land values in excess of the threshold will be taxed at 1.6%. The land tax is assessed on the land held on the 31st of December, pre-planning is pivotal in avoiding unnecessary land tax liabilities.

Income Tax

This is capped at 15%. With the current company tax rate at 26% and individual tax rates up to 47%, tax can be saved by having positively geared property in a SMSF which can then be reinvested, creating a compounding effect by making earnings on your tax savings. The opposite, however, applies for negative gearing, as any tax benefit is at a lower rate for a super fund and could be nil depending on the super fund status.

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.