A Self-Managed Super Fund is a unique retirement savings option that provides individuals with greater control over their superannuation investments. Unlike other super funds, SMSF members typically serve as trustees, granting them direct influence over investment decisions. This level of control allows for strategic investment planning aligned with specific financial goals. At Vie, our focus is to guide clients in leveraging SMSFs for investment property loans, ensuring a comprehensive approach to building wealth for retirement.
Think of your Self-Managed Super Fund (SMSF) like a financial reserve for your retirement. While you're working, you contribute funds to it, and those funds are strategically invested to grow over time. The goal is to build a substantial pool of savings by the time you retire. Then, when you enter the retirement phase, you can tap into this reserve of wealth you've accumulated, providing a financial foundation for your post-working years. It mirrors a tailored savings strategy designed to ensure a financially secure and comfortable retirement.
Acquiring residential or commercial properties through a Self-Managed Super Fund (SMSF) is a feasible option, but specific criteria must be met:
Investment Purpose: The property must be procured with the sole intention of serving as an investment and subsequently leased to a third party at an arm's length.
Exclusion of Development: Properties requiring construction or categorized as vacant land are not permissible within the SMSF structure.
ATO Sole Purpose Test: To align with the Australian Taxation Office's (ATO) regulations, the property must meet the 'sole purpose test,' ensuring that its primary function is to provide benefits exclusively to fund members upon retirement.
Restrictions on Sale and Occupation: A property purchased by the SMSF should neither be sold by a fund member nor occupied by them or any related person. However, commercial properties acquired by the fund may be leased to a fund member for business purposes, adhering to specific guidelines and at market rates.
Title Limitations: When acquiring a property through an SMSF, only one title per contract is permitted. For instance, a duplex spanning two titles and sold in a single transaction necessitates separate transactions and loans to comply with SMSF regulations.