Property & Borrowings in an SMSF
You can buy direct property within your superannuation fund.
One of the biggest advantages that having a self-managed super fund (SMSF) offer, is the opportunity to invest in property. New legislation was introduced in 2007 that permitted borrowings to occur within self-managed super funds to invest in direct property.
If you don’t have sufficient funds in your superfund to buy a property outright it is now possible for your SMSF to borrow funds for property investment if structured in accordance with the ATO’s requirements. By taking control yourself with appropriate advice you can maximise your potential retirement benefits.
It is essential to seek out advice from a good solicitor and often a financial planner before going down the track of buying investment property in your SMSF. Generally, there should be more than $150,000 in the SMSF before even first considering an investment property. Your fund can usually only borrow a maximum of 80% of the purchase price so the fund has to pay 20% plus stamp duty and other costs. Some types of property investment purchase are not suitable for SMSF’s.
You should talk to Lime Property Solutions, about the right way to structure your SMSF before you do anything else. They can have a discussion then put you in touch with the necessary good professionals who will assist in making sure you have a compliant fund.
