All Topics / Help Needed! / Is it possible to set-up existing IP as self maged super fund?

Viewing 6 posts - 1 through 6 (of 6 total)
  • Profile photo of pman1971pman1971
    Member
    @pman1971
    Join Date: 2007
    Post Count: 10
    July 6, 2008 - 12:10 am

    Hi all,

    I currently have a an investment property which is worth $450K and have $265K owing. Now as interest rates have increased significantly it is tough to finance the $530K on my PPOR plus $265K. I can sell the IP to free up cash and reduce my total loan which would be easy to service but would like to hold onto my IP for long term growth.

    Is it possible to set-up my existing IP in a self managed super fund? I currently have $120K in super and would like to know if it possible to put all of that against the loan. (My wife has about $20K in super as well) Also could my super contributions made be directed to reducing the $265-$120K = $145 debt?

    Any advice or referal to a professional who can help me start this up would be greatly appreciated

    Thanks Petros

    Profile photo of crjcrj
    Participant
    @crj
    Join Date: 2004
    Post Count: 618
    July 6, 2008 - 3:30 am

    If your IP is residential forget it.  If business property maybe but it will be costly.  You are probably going to be up for CGT too

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024
    July 6, 2008 - 4:50 am

    Hi Petros

    Regretfully you are uable to transfer an existing residential property into your SMSF.

    Stupid thing is you can sell the existing IP and then your SMSF can buy the IP next to yours and gear against it.

    You could salary sacrifice on make deductible contributions and use these to support the shortfall.

    The SISA rules dont make sense sometimes but they are aimed at providing you with benefits once you reach retirement age.

    In you situation have you thought about converting both the IP and PPOR loan to an interest only loan and review both the interest rates to see if you could save some money.

    Are you having your salary adjusted at source to aid with the shortfall and have you undertaken a QS report and claiming all your allowable deductions as well as any loan costs etc.

    Be suprising how much you can save when the set and structure is correct.

    Richard Taylor | Australia's leading private lender

    Profile photo of 4141915541419155
    Participant
    @41419155
    Join Date: 2008
    Post Count: 33
    July 6, 2008 - 5:35 am

    hey i am only new to investing gargon. could you please help me with some of the lingo. what do IP, SMSF, SISA, PPOR and QS mean?

    Thanks for your help.

    Jerome

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024
    July 6, 2008 - 5:49 am

    Hi Jerome

    No problems at all

    IP = Investment Property.
    SMSF = Self Managed Super Fund
    SISA = Superanuation Industry Supervision Act (Legislation which governs Superanuation Funds)
    PPOR = Principal place of residence (own home)
    QS = Quantity Surveyor

    Richard Taylor | Australia's leading private lender

    Profile photo of 4141915541419155
    Participant
    @41419155
    Join Date: 2008
    Post Count: 33
    July 7, 2008 - 4:26 am

    thanks alot Richard. that all make so much sence now.

Viewing 6 posts - 1 through 6 (of 6 total)

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