Self managed superannuation fund (sMSF)
Would you like to take control of your financial future? If so, you will benefit from our seamless, end-to-end solution for Australian’s wanting to take control of their super.
what is a SMSF?
A Self-Managed Superannuation Fund (SMSF) is a tax structure that allows people to control their own superannuation investments in preparation for retirement. A SMSF allows you to invest in a very broad range of directly held assets and investments including direct property and direct equities.
For larger superannuation balances the fees are generally lower than retail super funds, and the flexible nature of SMSFs allow you to benefit from the significant tax advantages that superannuation provides.
The SMSF can have up to four members so you can include your family, giving the fund more to invest and keeping fees lower for everyone.
Setting up an SMSF is a major financial decision and you need to have the time and skills to do it. If you set one up, you’re responsible for running it in accordance with the law and reporting to the ATO on its operation. A correctly structured and efficiently run SMSF can deliver substantial benefits, which is why it is important to receive professional advice and partner with the right experts.
In partnership we provide a comprehensive SMSF Accounting, Compliance and Administration service. We take care of the fund setup if you’re looking to establish a fund. If you have an existing SMSF we can assist you to transfer your fund to our service. We handle the fund’s paperwork – tax returns, member contribution statements and the annual audit.
Property in SMSF
Investing in property is a widely adopted way to create long-term, sustainable wealth. Now you can take advantage of these great benefits using your superannuation:
- Increase your investment property portfolio without impacting your take home pay;
- Take control of your superannuation through direct property investment;
- Preserve your already hard-earned superannuation;
- Sell an investment property and pay zero capital gains tax (CGT);
- Receive rental income tax free;
- Take control of your self-funded retirement.
We would generally recommend that you have at least $150,000 in super for buying property in an SMSF to be viable. Please feel free to contact us even if you do not meet minimum requirements specified here, as we are able to help with alternatives to achieve an investment in property via superannuation.
It is also important to consider adequate diversification in any superannuation investment to ensure that your wealth is protected from adverse market movements. Investments inside an SMSF are not protected by the same government compensation scheme that protects retail superannuation balances.
An SMSF is the only investment vehicle that allows you to invest in direct property assets using your Superannuation. Once within the SMSF, the property will attract tax on rental income of no more than 15% and capital gains tax of no more than 10%. Once the SMSF is in pension phase no tax may be payable on the property at all.
SMSF Property Process -
Step 1: Strategy meeting
In the initial meeting, we’ll discuss the SMSF gearing strategy specific to your personal situation and develop a plan of action for your investment property purchase.
Step 2: Implementation
You’ll receive a formal written Statement of Advice detailing the recommended financial strategy with regards to:
purchase price that is achievable
- a loan value that is appropriate
- a repayment schedule that has been stress tested and meets your retirement savings goals and objectives
Step 3: SMSF Gearing structure setup
We will liaise with our legal team to establish the nominee company and bare trust to hold your investment property, as well as ensure all necessary minutes are complete to facilitate this structure within your SMSF.
SMSF. Step 4: Finance arrangement
We’ll work with a specialist SMSF lender and assist with the preparation and submission of an SMSF loan application form with all supporting documents to obtain conditional loan approval.
Step 5: You are now ready to purchase a property
Max Capital Management will work with your licenced property professional to ensure that an appropriate price range (and LVR) is set that fits with the overall strategy as set out in the SoA.
Step 6: Settlement and ongoing administration
Our specialist SMSF can assist in the settlement of your property purchase and integration into your SMSF. After settlement, our SMSF team will provide ongoing administration and complete and comprehensive management of your SMSF.
Some of the rules
There are strict rules you need to follow when purchasing residential property including:
- You can’t purchase property from yourself or a related party (friend, relative, spouse or former spouse).
- You can’t stay in the property or lease it to a related party (it must be for investment purposes only)
There are a number of important steps involved in an SMSF gearing strategy. To complete the process, we will put you in touch with our Advisors who will guide you through the process from start to finish.
Use your Super to buy an investment property
One of the advantages of a SMSF over other types of superannuation is that you can use this vehicle to buy direct investment property with your super. You can even borrow money inside your SMSF (via a Limited Recourse Borrowing Arrangement) so you can afford a property worth more than your super assets.
Property in SMSF
Investing in property is a widely adopted strategy to create long-term, sustainable wealth. Now you can take advantage of these great benefits using your superannuation:
- Would you like to increase your investment property portfolio?
- Would you like to purchase an investment property without out impacting your take home pay?
- Would you like to make an investment in property and pay zero capital gains tax (CGT)?
- Would you like a simple strategy to plan for your self-funded retirement?
This is all possible, very achievable and also relatively easy with the right advice. All you need is a combined superannuation balance of $150,000 to invest in a property valued up to $300,000, or a combined superannuation balance of $200,000 to invest in a property valued up to $400,000. Please feel free to contact us even if you do not meet minimum requirements specified here, as we are able to help with alternatives to achieve an investment in property via superannuation.
SMSF Limited Recourse.pdf
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