Self-managed superannuation funds (SMSF) provide the opportunity to take control of your super, providing the choice and flexibility allowing you to borrow to invest in direct real estate with SMSF Loans. Changes in superannuation laws have allowed SMSFs to borrow money to purchase residential or commercial property. This strategy has been popular with small business owners and now is attractive for mum and dad investors looking to enter the property market and secure their retirement future by investing in property. SMSF property is arguably the best tax incentive with a concessional tax rate of 15% in accumulation phase and no tax in pension phase
Advantages of SMSF loans to purchase property
• Insufficient funds in your SMSF to buy the property outright
• Reduce the cash flow commitment of your fund
• Borrowing can asset to diversify your SMSF Investment Portfolio
• tax deduction for loan repayments
• SAVE TAX – you can hold a property until pension age and pay no tax on capital growth
Why are SMSF Loans so appealing?
With many first home buyers priced out of the residential property, many investors are using their superannuation as an opportunity to enter Australia’s heated property market, with a buy now and hold strategy.
SMSF loans can benefit diversification by borrowing up to 80% of value of a residential property and 70% of the value of a commercial property. Remaining funds can be used to save $$$ or further diversify your investment portfolio.