SMSF and Property: Unlocking Investment Opportunities
The Growing Popularity of Direct Property Investment
Let us guide you through the SMSF and Property maze. Since the relaxation of SMSF rules in 2007, which allowed Self-Managed Super Funds to use borrowings to acquire property, thousands of investors have seized the opportunity to diversify their portfolios. Investing in direct property through a SMSF has become increasingly popular, but navigating the strict regulations surrounding SMSF borrowing can be complex.
Expert Advice for Informed Decision Making
Based on our comprehensive experience, we understand the intricacies of SMSF and property investment and we’re committed to assisting you through the complex rules and regulations. Our expert advice empowers you to make informed decisions that align with your investment strategy and retirement goals.
Navigating Limited Recourse Borrowing Arrangements
We’ll help you understand the specific rules for borrowing within a SMSF, including the bare trust arrangement. This structure dictates that the bare trust owns the property until the loan is paid out in full, at which point it is transferred to the super fund. Our team ensures that this process is carried out in a precise manner to maintain compliance.
Establishing the Right Borrowing Structure
To meet all rules and regulations, it’s crucial to set up the correct borrowing structure. We’ll work with you to ensure everything you need is accurately in place when you need it.
Capital Gains Tax Advice
Our knowledgeable staff will walk you through potential capital gains tax scenarios, helping you save tax wherever possible. We’ll provide guidance on the timing required to minimise your tax liability while maximising your returns.
Understanding SMSF and Property Investment Options
Types of Properties Allowed
SMSFs can invest in various types of properties, including commercial, residential, and holiday properties. We’ll help you understand the rules surrounding each type of investment and guide you through the process of directly investing or entering into a tenants-in-common arrangement with another party.
Rent and Related Party Considerations
When investing in property through your SMSF, it’s essential to ensure that rent is set at a commercial rate, neither higher nor lower than market value. While you can rent commercial property to related parties, residential property investments must be at arm’s length. Care must be taken around holiday homes and units to ensure the Sole Purpose test is met.
Adhering to the Sole Purpose Test
All investments made by your SMSF must comply with the Sole Purpose Test, which ensures that each investment or action undertaken by the fund is for the sole purpose of providing retirement or death benefits to the beneficiaries. We’ll help you navigate this critical requirement, ensuring your investments remain compliant.
Your Partner in SMSF and Property Investment Guidance
The Award Super Solutions team is dedicated to being your trusted partner in SMSF and property investment. Our expert advice, coupled with our commitment to helping you navigate complex rules and regulations, empowers you to make informed decisions that support your long-term investment goals. Contact us today to learn more about how we can assist you in unlocking the potential of property investment through your SMSF.