Using your super to buy residential property

I have a self managed super fund and I have bought property in my fund….but…..a super fund can not borrow money so it must buy outright the property and be able to cover costs. In saying this you need to be looking at a good return to make it a worthy investment.

GGG

HI there, my acctant advisd you can buy resi property with SF but as youa re to keep arms length from the SF until you retire, I don’t think you can live in it -best spk to your acctant about that one.

Hi Rickster12,

We self manage our own super fund and had enough funds to purchase outright a property in Singleton last year, GGG is right your super fund cannot borrow any monies. Good luck investing,

Vyvyen

Steve

Afraid not. In the oldern dark days you used to be able to purchase a commercial property and rent it to yourself paying your SMSF the rent.

You also used to be able to purchase the property in conjunction with your Unit Trust and borrow funds in the UT name as a proportion to the ownership percentage.

All such loop holes have now closed.

However still many things you can do in a SMSF including wrapping. I have 4/5 properties in my SMSF which i have wrapped and enjoyed the higher rate of return.

Just have to be careful that what you do is not classsifed as running a business or trade.

Cheers Richard
richard at fhog.com.au
http://www.fhog.com.au

There is no such thing as a problem.
Just a solution waiting to be found

Hi Rickster

We have a great resource on our site covering SMSF’s, SMSF Faq’s, Can do and cant do’s have a look it is great read…..see how you go. You may even like to make a posing under the superannuation section of our forum

Regards
IF

http://www.imperator.com.au Imperator Financial is Australia’s most comprehensive consumer financial information and financial planner referral service. We also have a number of other resources including SMSF’s http://www.imperator.com.au/superannuation/smsf.asp info, Legal Will, Power of Attorney, Grant of Probate and Prenuptial Agreement Kits http://www.imperator.com.au/legalkits.asp , Finance Forum http://www.imperator.com.au/finance_forum/ and more.

Sorry Cata good idea but u can’t do … see u in jail, not me.

resi

hi Ricksters12
have a chat with cata or coastymike to structure it correctly but you may need two trusts one a unit trust to purchase the property in a name (my favourite is a company above but they can work that out.)the money investered into this trust is from a self managed super fund again can be a trust which would get a return from the first.when the property is payed off it flows thru the trust and one oif the unit holders is the super fund trust which can be added at any time.
Cata can you email me at [email protected]
with regard to another post on why you would by land in a different entity to the developer.
Ricksters12 you can email me to the above and will talk to one of my guys and he may have a structure you can use make sure you put your name fromn here as I get lot of emails.

here to help

hi interesting subject area…
having just spend 2 years on an tax audit with the ato and spending $30,000 in accountant fees cleaning up and complying with the ato rules on super, the only advice i can give u is stay away from it….the penalities are too great
harry

Hi Everyone,
We have a SMSF and have used it in partnership with ourselves, we purchased a property and did not have to borrow at the time, doubled our money in 14 months and sold. Here is the good part, super fund is only liable for 15% CGT on 50% profit which is split up amoungst 3 partners ( my wife, myself and SMSF ).My wife and I are taxed at usual rate on third of 50% profit. At the time the property was blue chip, but no income, so it was good to own it outright. Not using it for property at the moment, but handy to have as a partner.

Don

djr