SELF MANAGED SUPER FUNDS - SMSF

Purchasing property in your superfund with a loan

• Are you concerned about your ability to self-fund your retirement?
• Do you have a min $120,000 in your superfund and understand the benefits that increasing your current asset base by a factor of 3 times immediately (by way of a loan to purchase a property) will provide you with a more comfortable retirement? This provides you with the potential to accelerate your wealth creation.
• Do you understand the long term benefits of property ownership?
• Are you looking for a loan with no recourse to you personally or to your other superfund assets?

Well, the rules have changed and super funds can now borrow to purchase investment properties, making your superfund perfect for gearing up direct property.

Benefit of using your SMSF

The following are a list of some of the benefits of purchasing through a SMSF:

1. Utilise of existing balance in your SMSF for the deposit and contribution. Inside of super you can take advantage of your existing superannuation balance and use these funds to help purchase an investment property. Outside of super you will require to borrow the full amount or utilise your savings
2. Utilise your annual superannuation contributions to make principal loan repayments. If you are PAYG employed your employer makes 9% SG contributions to your super. With a SMSF loan you can use these funds to make additional payments into your loan that will result in repayment the loan quicker.
3. Superannuation offers various income tax and capital gains tax benefits for when you retire or sell the property. Its best to speak with an accountant or financial planner about these benefits

We have recently performed financial modeling for a client and have concluded that they can repay their full SMSF loan within 10 years and have an unencumbed investment property in their superannuation. The alternative (purchase in personal names) would result in have an investment loan of $400,000. The financial modeling assumed a zero annual cash flow difference between the two scenarios.

SMSF borrowing carries with it a range of compliance, regulatory and finance requirements that need to be satisfied. It is therefore essential that you have access to appropriate solicitors, accountants and finance brokers that understand this market.

We understand this market and have already completed a number of SMSF purchases and loans. In addition we can facilitate an introduction to solicitors and accountants that specilise in this area.