Investing through a Self Managed Super Fund (SMSF)
Many Australians are now choosing to manage their own superannuation. Why? For the advantages of –
- Investment Control
- Effective Tax Management
- Greater Investment Flexibility
- Capacity to pool your super with up to 3 other individuals
- Estate Planning flexibility
How it works
- Your SMSF selects a residential investment property to purchase, then appoints a property trustee to purchase the property on its behalf.
- Your SMSF applies for the SMSF Investment Property Loan.
- The property trustee pays the deposit and exchanges contracts.
- If your loan is approved, at settlement the property trustee mortgages the property to Lender and the lender advances the loan.
- Your SMSF trustee pays all legal costs and stamp duty.
- Your SMSF collects rent, pays the usual outgoings on the property and makes the loan repayments. It manages the property in the same way as any other real estate investment.
- The property is held in trust for the SMSF by the property trustee and once the loan is repaid, the legal title may be transferred from the property trustee to the SMSF, or the property may be sold.
The rules around borrowing through an SMSF are quite complex so you should speak to your financial planner and professional tax adviser before deciding whether to borrow in order to invest within your SMSF.
If you would like to borrow through your SMSF, then please contact us.