One of the advantages of having a self-managed super fund (SMSF) is that you can invest directly into residential property through your super.
Our team of professionals can help you;
- Set up your SMSF (or update your existing SMSF)
- Source appropriate investment property,
- Arrange finance, and
- Manage ongoing compliance.
The major benefits when you buy property through your super are:
Under an SMSF structure, the maximum tax rate your SMSF will pay on rental income is 15%. If your SMSF is in the pension phase, this rate drops to 0%. This compares favorably with personally held property where rental income is taxed at your marginal tax rate.
In addition, if your SMSF holds the property for more than 12 months, any capital gain made on the sale of the investment property will be taxed at a maximum rate of 10%, or again, 0% if the SMSF is in pension phase.
Gearing + Diversification
Due to the generally high price of purchasing a residential property that has the potential to provide good long term returns and capital growth, it may be appropriate to borrow to purchase a property within your SMSF. SMSF borrowing to invest in property can help your SMSF maintain an appropriate level of diversification.
Strong Yield + Long Term Growth
Purchasing residential property within your SMSF can be an effective way to increase the value of your retirement savings. Firstly, the maximum tax rate your SMSF will pay on rental income is 15%.
Secondly, residential property generally returns around 10% pa, comprising approximately 4% net income and 6% capital growth.
At PT Property, we can help you can get the most out of your SMSF, building up a nest egg for your retirement.