Property Investment in DIY Super Funds
Investment properties as part of your DIY Super Fund...
A DIY or Self Managed Superannuation Fund (SMSF) is a Super Fund that you own and manage yourself. If you are an investor who wants complete control over your superannuation’s assets a DIY super fund is perfect option as long as you are willing to deal with, sometimes complex, legislative constraints.
The Benefits of Property Investment in DIY Super
The major advantage of using your DIY or SMFS fund to purchase investment property is the tax benefits. For example – a superannuation fund pays a maximum of 15% tax on rental income, and only 10% capital gains tax if the fund has owned the property for at least 12 months. Interest payments are also tax deductible.
Apart from making your own decisions a DIY fund gives you the freedom to structure your retirement super to suit your personal needs and situation.
The trustee is allowed to borrow funds under an ‘instalment warrant’ which means the lender has no recourse over other assets in the DIY super fund.
Compliance Responsibility
As the trustee of the fund you will decide what investments to make, but you are also responsible for ensuring your fund complies with the Superannuation Industry (Supervision) Act 1993 (SIS Act). This complex undertaking should be taken seriously, but, when managed correctly, the benefits can be significant.
The ATO requires you to prepare and implement an investment strategy for your SMSF fund, and review it regularly. The strategy needs to reflect the purpose and circumstances of your fund.
Make Property is a business unit of The Make Group and specialises in researching and locating the best property investment opportunities across Australia. Whether you are seeking a Brisbane investment property, Sydney investment property, Melbourne investment property, Gold Coast investment property or further afield, Make Property has the investment property portfolio you are seeking.