Start Your Property Journey With Superannuation
Planning for a comfortable retirement? Unlock the benefits of investing in property through Superannuation for greater returns and financial security.
Are you thinking about how you can get on the property ladder? There are an increasing number of Australians that are getting their money to work for them by using a self managed super fund (SMSF) to buy property, however; Getting the right advice is so important.
In this video Kiran Khan, OpenCorp Senior Investment Consultant, talks through what you need to know about the benefits of investing in property through SMSF.
Key Benefits
Zero out of pocket expenses
Gives you access to a deposit. Your superannuation will fund ALL of the costs associated with purchasing an investment property ie. Stamp duty, solicitors fees, banking costs etc.
Most banks provide loans to people buying property with SMSF of up to 80% of the property value.
Tax
Benefits
Any rental income earned by your fund’s investment property is taxed at a flat 15%.
This is well below the marginal tax rates, which could be 45% depending on your income threshold.
Retirement income
Once your SMSF owns the property outright, the passive rental income to fund your retirement.
Any rental income or capital gains may be tax free during the retirement phase.
Grow retirement savings faster
Investments made through Self-Managed Super Funds do not impact personal borrowing capabilities.
Client example
Peter has $250,000 in superannuation. He wants to establish an SMSF and buy an investment property worth $650,000.
Using an SMSF loan, Peter’s SMSF can borrow $450,000 using the property as security. The property can be rented to an unrelated party at market rates and the rent, together with further super contributions and/or other SMSF income, is used to repay the loan.
Once the loan is paid off, the income from the property in Peter’s SMSF can be used to fund his retirement.
Also, if Peter’s investment property of $650K grows by 6% per annum, which is below the national average over the last 15 years, for Peter to achieve the same result through his $250,000 in super it would need to grow by 13% per annum over the same period. The average industry superfund has returned an annualised 5.6 % over the last 5 years according to The Association of Superannuation Funds of Australia (ASFA).
Getting the right advice
Book a Discovery Call with one of our consultants who will get an understanding of your current position and where you want to be at retirement.
Our consultants will also answer any of the questions you have to ensure you are making the best decision for your personal situation.
Find out more about the discovery call process here.
