Super Fund Real Estate

You are now able to buy a residential, rural, commercial or industrial property through your self managed super fund (SMSF). Changes to the Superannuation Industry Act (SIS) ACT) in September 2007 means that your self managed super fund can now borrow money to purchase real estate in Australia. This exciting new development means that investors now have a much larger choice and control over what investments they can include in their SMSF, including investment properties.

Your SMSF want to buy property (either residential, rural or commercial real estate), but does not have enough funds for the full purchase. The SMSF can now make an equity contribution on the property and borrow the remainder of the funds to complete the purchase.

The benefits of using SMSF to Purchase Real Estate

• Your SMSF can acquire property worth more than its available funds through the benefits of gearing SMSF assets are secure, as the mortgage lender does not have recourse to your SMSF’s other assets in the event of default
• Your SMSF receives all income and capital growth even if the property has not been paid off
• Your SMSF can use income generated from the property to help pay off the home loan
• Interest from the home loan may be claimed as tax deductions by the self managed super fund and can potentially reduce your SMSF’s tax liability.

One of the key advantages of an SMSF is the flexibility in asset class selection. Whether it be direct shares, managed funds, commodities, property, derivatives, cash or term deposits so long as some key rules & correct structures are adhered to, the investment universe is almost endless.