November 27, 2012 by stirling

Property In Super

Australian’s undoubtedly have, a love affair with property whether it is their own family home or their investment properties.

Investors like the security of bricks and mortar.

The hardest decision for most couples is to determine when is the right time to buy that investment property.  Do you wait until:

  • You have enough equity in your family home
  • Paid off your mortgage
  • When the kids leave home and stop draining your wallet

The other things that couples worry about are:

  • Adding rental income to your annual taxable income
  • Capital Gains Tax on the sale of the property
  • What if the property is vacant can we afford to add the extra money to pay property expenses including the mortgage

Well there is another way to get started with your property portfolio.

You can start a Self- Managed Superannuation Fund (SMSF) roll your superannuation savings into your new fund and use this money and borrowings to buy a property.

What are the advantages of buying an investment property with your superannuation savings?

  • Having equity in your home is not necessary, you just need superannuation savings
  • The borrowing is through the SMSF and has nothing to do with your personal financial affairs
  • Borrowings for an investment property don’t use your home as security
  • You don’t need to wait for the kids to leave home
  • Any income derived from the investment property goes to the SMSF and is not added to your personal taxable income
  • Capital Gains Tax if payable is taxed at a maximum 15% and not your marginal rate of tax
  • Keeping a property into retirement can negate any Capital Gains Tax altogether
  • If the property is vacant the SMSF will need to pay all expenses, you will not need to add money from your own pocket

Do you think it is time that you take control of your superannuation and maximise the growth of your retirement savings so you have more money to enjoy when you reach retirement?

Make an appointment to see our SMSF specialists and see how this strategy can work for you.