SMSFs have surged in popularity now laws in Australia allow borrowing through a super fund for property investments. It’s never been more important to take your financial future into your own hands and give yourself a secure retirement.
If you’re still skeptical, we have four main advantages to buying an investment property through a self-managed super fund!
1. Attractive Tax Structure
No one likes paying more tax than they need to! SMSFs benefit from the same concessional tax rates as any other super fund.
Tax on investment income is capped at 15% – Once you reach retirement age you pay no tax on your investment income at all.
Capital Gains Tax is capped at 10% – If you hold the property for more than 12 months, or better still if you wait until retirement to sell, you don’t pay any Capital Gains Tax at all.
This allows you to maximise the income generated from the investment whilst minimising your tax. What’s better than that?
2. You don’t have to part with any of your hard-earned cash
This one’s a little conditional…
If you have enough in your Super to fund the purchase and ongoing costs of the property, you can buy without needing to access any of your other funds.
3. Maximise your borrowing capacity
It’s only getting more and more difficult to borrow to your full potential. But when it comes to the banks, superannuation is considered a separate entity.
This means you can utilise assets that you have in superannuation as a deposit to buy an investment property. Use the income from super to increase your borrowing capacity. So, even if you’ve reached your maximum borrowing capacity, you may still be able to grow your property portfolio using your super.
4. You’re in full control!
A great advantage of having an SMSF is the ability to control your financial future without having to rely on others to decide how much money you will have in retirement. So your future is in your own hands!
It’s important you get the right advice before deciding if an SMSF is for you. If you need help with your SMSF contact the team at Rise High here or fill out the form below and we can help you secure your financial future!