property purchase with Self Managed super

Viewing 7 posts - 1 through 7 (of 7 total)

LittleMermaid
Member
@littlemermaid
Join Date: 2003
Post Count: 9
June 13, 2003 - 11:31 am
My husband and I are in the process of setting up a self managed super fund on the advice of our accountant/financial advisor. Does anyone know if the funds can be used to purchase residential property. I was told only commercial property but we live in Qld and I am not sure whether the rules vary from state to state.[]
AD
Participant
@ad
Join Date: 2002
Post Count: 636
June 13, 2003 - 11:47 am
I think the basic rule is the fund cannot borrow money but it can certainly hold the residential property if it owns it outright. Correct me if I am wrong Financial gurus…..
Enjoy
AD [:0)]
(Andrew)
“Character cannot be developed in ease and quiet. Only through experience of trial and suffering can the soul be strengthened, ambition inspired, and success achieved.”
Saskatoon
Participant
@saskatoon
Join Date: 2002
Post Count: 112
June 13, 2003 - 10:10 pm
Hi Little Mermaid,
can I suggest that you borrow or buy “DIY Superannuation” by Austin Donnelly. Since you have already started the process this book should give you more knowledge to help you achieve your goals.
Terry
Terence McMahon
HomeWin
Finance
Winterose
Participant
@winterose
Join Date: 2003
Post Count: 31
June 14, 2003 - 3:46 am
Can joint venture be set up where the superfund provides the deposit and my trust borrows the balance? Any accountants/gurus out there?
Cookie
DaveC
Member
@davec
Join Date: 2003
Post Count: 79
June 14, 2003 - 5:00 am
Hi Little Mermaid
Yes!! You can buy residential property with your self managed super fund but as has already been pointed out the big disadvantage is that you can not leverage your money for the purchase of the asset.
My understanding is that you can live in the property even as one of the beneficiaries of that super fund.
Take care
Dave []
hilary
Member
@hilary
Join Date: 2002
Post Count: 146
June 15, 2003 - 7:22 am
Cookie, your smsf cannot borrow, nor can the property have a debt against it- so – the joint partner cannot have a mortgage over this property, but []if the mortgage is against an unrelated property, then that’s ok. Phone the super hotline if in doubt, but make sure you get their decision in writing – they’ve been known to change their minds!![!]
ldp43.
Member
@ldp43.
Join Date: 2003
Post Count: 10
June 15, 2003 - 2:27 pm
Hilary is correct.
A super fund cannot have a charge over any of its assets. However SMSF can pay cash for all or part of a property providing any other part owner pays cash. The other part owner may use equity in their own home eg to raise the cash.
Members of the SMSF cannot rent the IP. A SMSF must have a Sole Purpose of providing retirement income, a member cannot benefit directly from any of its actions before that time.
Regards…
Laurie