Average Australian capital city house prices rose around 1.8% in June 2017 according to research firm CoreLogic. Sydney remains the most expensive city with a median dwelling value of $880,000. This may make investing in Australian property seem like an unattainable dream.
If you consider using your self-managed super fund (SMSF) to buy, you’re on your way to starting an investment property portfolio and enjoy a more comfortable retirement!
3 reasons to consider purchasing investment properties with yourself managed super
- Diversify your fund assets
A key benefit of SMSFs is that they offer a wider range of investment options than traditional super funds – including investment property. By spreading your savings across asset types, you may help reduce risk while still investing for growth.
- Build a bigger portfolio sooner
An SMSF can borrow to invest in residential or commercial property. Lenders will generally fund up to 70% or 80% of the purchase price. [Please talk to your investment advisor for clarification and details]. Now’s the time to take advantage of low interest rates and begin or expand your property portfolio. If you would like to talk to one of our trusted advisors, please contact us on (03) 9758 5331
- Potentially save on tax
SMSFs can use negative gearing to claim a deduction for borrowing expenses, just like individuals. Investing through an SMSF can have other tax advantages as well. Rental income paid to your SMSF is generally taxed at just 15%. If you are over 55 and commence a Pension in your SMSF, then the rent you receive is tax free. More importantly after commencing a Pension in your SMSF, any capital gain when you sell the Property is also be tax free!
While investing in property through your SMSF can be an attractive strategy, please ensure you confer with your legal, accounting and investments advisers before acting. There are also a range of rules you may need to observe, please speak to us for further information.
Property Friends is a specialist Property Investment Advocacy that has been operating for the last 13 years on the basis of 3 principles: Trust, Community & Progress. www.propertyfriends.com.au (03) 9758 5331