© PPA Articles — www.propertyplanning.com.au.
Reproduced with permission.
As a SMSF auditor and compliance consultant, the most common question I get asked by prospective and existing trustees is “can my SMSF borrow if it needs to acquire property?”
Recent changes to SMSF legislation now enables your self-managed superannuation fund to take advantage of the benefits investing in property offers. An enhancement of the laws surrounding SMSFs now permits borrowing, up to 80% in some cases, to purchase investment property through a structure controlled by your SMSF called a “Property Warrant”.
Simply, this means the SMSF will need enough cash to fund the 20% deposit and costs to purchase an investment property. For example, a SMSF could purchase a $350,000 property with a $70,000 (20%) deposit, $20,000 in costs, and a $10,000 buffer, seeing the total SMSF equity investment being $100,000 in this case.
But I always close by pointing out that an investment of this nature is a financial decision which under superannuation law must be made in accordance with the SMSFs investment strategy formulated by the trustees in light of risk, liquidity and diversification.
If you would like to discuss this further with myself and/or one of our PPA financial advisers please contact us for a complimentary property plan discussion.
Property Planning Australia’s professionals can show you how!
Our Financial Advisers, Property Advocacy and Lending Experts and in-house Chartered Accountants will work together to provide you with:
• Advice and assistance to consolidate and move your superannuation into a Self-Managed Super Fund that you control.
• Financial advice to guide you on how to best invest your retirement savings.
• Financial and Taxation advice to maximise wealth creation through minimising capital gains tax, reducing personal income tax through transition to retirement and salary sacrifice strategies and assessing whether small business taxations concessions apply to you.
• Lending experts can arrange finance for your SMSF to borrow to acquire real property.
• Taxation services to assist with your individual, business and SMSF annual compliance.
To book a meeting with SMSF expert, Steve Russo, Click HERE