SMSF Property Investment
At WT Capital, we specialise in SMSF property investing for people at all stages of life. From suburban homes to commercial developments, real estate assets can help you to reduce risk and maximise returns before and after retirement. SMSF property investing is a complex and highly regulated field, with our financial experts offering diverse opportunities to help you thrive.
If you're interested in buying property with super, our SMSF investment property experts can make it happen.
If you're interested in buying property with super, our SMSF investment property experts can make it happen.
What is a SMSF?
A self-managed super fund (SMSF) is a private super fund that you manage yourself, often with the help of a third party. Sometimes called DIY super, a SMSF provides investors with greater financial control and more investing opportunities. According to the Australian Taxation Office (ATO), there are nearly 600,000 SMSFs and more than 1.1 million SMSF members in Australia. There are lots of reasons to choose a SMSF, from better performance and lower costs to more investing opportunities.
At WT Capital, we specialise in SMSF property investing, SMSF setup procedures, and diverse property investment solutions. Whatever your needs, we can make your property dreams come true.
At WT Capital, we specialise in SMSF property investing, SMSF setup procedures, and diverse property investment solutions. Whatever your needs, we can make your property dreams come true.
What is SMSF property investing?
SMSF property investing has become popular in recent years, as investors demand more flexibility and choice over their retirement savings. SMSF property provides tax advantages related to rental income and future capital gains, along with increased options and protection from creditors.
The tax benefits associated with SMSF property investing are significant. Net income generated by a SMSF will generally be taxed at a concessional 15% tax rate, and capital gains held for 12 months or more will receive a third discount with an effective tax rate of 10%.
In Australia, SMSFs are allowed to borrow money to fund a direct property purchase, as long as certain conditions are met. For residential assets, the property must be used purely as an investment, so it can't be lived in or rented by a fund member or a related party. For commercial assets, you can lease the property to a wide range of tenants, as long as it is used exclusively for business purposes.
The tax benefits associated with SMSF property investing are significant. Net income generated by a SMSF will generally be taxed at a concessional 15% tax rate, and capital gains held for 12 months or more will receive a third discount with an effective tax rate of 10%.
In Australia, SMSFs are allowed to borrow money to fund a direct property purchase, as long as certain conditions are met. For residential assets, the property must be used purely as an investment, so it can't be lived in or rented by a fund member or a related party. For commercial assets, you can lease the property to a wide range of tenants, as long as it is used exclusively for business purposes.
Borrowing for a SMSF investment property
Borrowing to buy property through your self-managed super fund can be complicated. You will need a 'limited recourse borrowing arrangement', which involves very strict borrowing conditions. While you can borrow for residential or commercial properties, you can only purchase a single asset under the details of this arrangement. This doesn’t mean you can’t have more than one property in your SMSF; it just means that these agreements must be worked out individually.
If you want to diversify your super by investing in property, it's important to connect with the SMSF property experts at WT Capital. Along with hooking you up with great property opportunities, we can help you to reduce the risk profile of your super fund.
If you want to diversify your super by investing in property, it's important to connect with the SMSF property experts at WT Capital. Along with hooking you up with great property opportunities, we can help you to reduce the risk profile of your super fund.
Benefits of a SMSF property investment
A SMSF property investment offers a variety of advantages, from immediate tax savings to long-term capital gains and financial protection. The following benefits are key:
Please review our website to check your eligibility, use our retirement calculator, or take a look at our case studies. If you need friendly support, please contact WT Capital today.
- Concessional tax on rental income
- Concessional tax on future capital gains
- Increased superannuation opportunities
- Protection from creditors in bankruptcy situations
- Assets don't influence eligibility for CGT concessions
Please review our website to check your eligibility, use our retirement calculator, or take a look at our case studies. If you need friendly support, please contact WT Capital today.
FAQs
Can you use your super to buy property?
If you're in a SMSF, you can use money from the fund to purchase an investment property. This type of investment comes under 'sole purpose' classification by the ATO, which means it can only be used to generate retirement income.
Can I buy residential property in a SMSF?
Residential property investors can use a SMSF to purchase property, as long as funding is available and certain conditions are met. While you can buy multiple investment properties with a SMSF, you need to analyse your fund’s ability to meet all upfront and ongoing costs. Subsequent properties need to meet the same rules as the initial property. If you're not careful, adding properties can be detrimental to your fund’s investment goals.
Why choose a property investment strategy over other asset classes?
SMSF property investing is restricted in many ways, including the 'sole purpose test' provision. The property in question needs to solely provide retirement benefits to fund members, which means it can't be used as a home in any way. Fund members and related parties are unable to live in or rent the home in any capacity.
Can I sell property from my SMSF to myself?
It depends on what sort of property it is — commercial properties such as farming estates or business premises can be purchased this way if they have been run at arm’s length. However, residential property cannot be purchased this way; it represents a potential conflict of interest.
Can you claim depreciation on an investment property?
Yes. You are able to sell the property on the market at any time you wish.
Can I buy land with my super?
If you have a common retail or industry fund, you can't make any decisions about investments, including property purchases. However, if you have a SMSF, you can purchase a wide range of properties, including residential, commercial, and industrial assets. This includes rural properties and vacant land.