Hi everyone.
I am tired of watching the "experts" loose my superannuation so I am about to start my own self managed super fund..
Question please.
There is not much there. $50,000 to be exact.
My wife and I are hoping to borrow against all this money to purchase an IP.
Assumption:
1)The major banks will lend for this purchase from a SMSF.
2) If we set the SMSF up as a company we can expect an LVR of 80% ie we can borrow $200,000 using ALL of our available funds.
3) Once the IP is onsold , if we have NOT retired, 15% of the capital gain will be taxable.
4) Stamp duty on the purchase has to be found from the funds available within the super fund money.
Has anyone done this in the real world and am I correct.?
Would really value your thoughts.
Thanks,
Brady5
Hi Brady
I have set up my own SMSF in the last year and used it to buy a property. In a nutshell, I found a great accountant who set up the super fund an corporate trustee for me for $1600. There a plenty of ripoff artists out there charging massive fees for what is not very hard.
All in all, if you want to know exactly how many dollars I spent on setting up my smsf, getting everything in order, paying deposit and stamp duty (yes, the smsf must pay stamp duty if it is an established property), the total funds used to set up and get first property was $62,555. Part of this was the 20%. The St George Bank loaned the remaining 80%. The price of the property was $226k. If my smsf sells it within the first year of ownership and makes a gain, the gain is taxed at 15%. Thereafter it is 10%….. or 0% if sold after you are retired.
What you want to do is set up your smsf, roll all your super funds into it, and then direct all your regular employer super contributions into it (straight into your smsf's bank account). Shortly you'll have enough to buy.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
ps Brady…. I sent you a PM
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Thanks so much JacM. Greatly appreciated and thank you for the PM. I will keep you informed.
$50k probably aint enough. Many lenders have a minimum loan size of $200,000.
1. Do you want to purchase from a SMSF? Or in a SMSF?
2. Do can't set up a SMSF as a company, but you can have a company as trustee and this is preferrable.
3. Not correct. If your SMSF sells CGT is charged at the rate of 15% or 10% on assets held more than 12 months
4. Doesn't have to be funded from existing funds, but can be borrowed from yourselves.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hi Terry, my smsf borrowed only $180k from St George Bank. I agree $50k is not quite rough but based on what I did with my super, within about a year of regular contributions, or sooner if larger contributions are made, Brady would have enough in the super fund to get started.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Normally would agree with Terry but most lenders we use have a minimum loan of $100,000 although i have actually done a deal or two on a low lvr at a lesser amount than that.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
ok, I admit defeat! Change the word 'many' to 'some' in my post! I know of at least one that has a minimum loan size.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Terry see what a 4 letter word can do to you.
You have just been relegated to back to a "wisdom of other" badge with that statement lol
Bit like snakes and ladders.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Guys,
From the above discussion i understand that CGT wont be taxed if the property is sold after retirement. My question is with relation to the period when the property is held and rented out before retirement, is the tax treatment same as it would had the IP been held by an individual or is it different?
regards
Jaideep
jaideepm wrote:Hi Guys,From the above discussion i understand that CGT wont be taxed if the property is sold after retirement. My question is with relation to the period when the property is held and rented out before retirement, is the tax treatment same as it would had the IP been held by an individual or is it different?
regards
Jaideep
If the member is in pension phase and the asset is being used to pay the pension then the SMSF won't pay any CGT when the asset is sold. If it wasn't in pension phase then 15% tax on income within the superfund including capital gains, but there is a 33% CGT discount for assets held longer than 12 months.
SMSFs can also negative gear – as in a loss on a property held within the fund can offset other income of the fund
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
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