SMSF is it worthwile?

We will forgive Terry for his spelling given his location. (In fact i thought it was better than my normal spelling and punctuation).

I think Terry actually meant  "A SMSF could borrow from a member to reno but couldn't use the property as security".

Also remember the there are Deductible and Non Deductible contributions.

Your Deductible contributions will depend on your age but in the main are limited to $25K per annum and include both your Employers Compulsory Guarantee amount as well as your own salary sacrificed amount.

Non Deductible contributions are limited to $150K per annum or $450K over a 3 year period and are paid out of post tax dollars.

Any Related party loan still need to be documented correctly although interestingly enough the ATO does not have an issue with you lending the money to your SMSF at a lower amount you are borrowing it at and claim a Tax deduction for the loss.

Cheers

Yours in Finance

Andrew there is no minimum or maximum percentage amount.

The Trustees of the fund formulate the Investment strategy of the Fund once the Fund is established (or amended) and they are then responsible for the investment decisions.

If you could justify that placing 100% of your SMSF money into property was a sound investment and your Fund Auditor signs off on it then it woould be acceptable.

Whether anyone would do that is a different matter.

Whilst i own a number of properties inside my SMSF (with nil borrowing) i also hold a variety of other income producing assets.

Personally i would never put 100% of my investment into a single asset class.

Cheers

Yours in Finance

Hi Terry

Yep it is a contribution as you say – though I've watched so many people scratch their heads over what that means that for the purpose of the renovation discussion, the only thing many folks understand is the word donation.  Only when that word is used do they seem to really understand they cannot then get it back out of super.