Self-Managed Super Funds
Explore the potential of using a Self-Managed Super Fund to secure a home loan, helping to expand your investment portfolio in preparation for retirement.
What is a Self-Managed Super Fund (SMSF)?
A Self-Managed Super Fund is a type of retirement savings option that offers individuals greater control over their superannuation investments. SMSF members typically act as trustees, allowing them to make direct investment decisions. At Vie, we specialise in guiding clients through the process of leveraging SMSFs for investment property loans, helping to expand their investment portfolios in preparation for retirement.
How does a SMSF work?
A Self-Managed Super Fund (SMSF) is a type of retirement savings plan where members contribute funds during their working years. These contributions are then invested with the objective of growing the fund over time. Upon reaching retirement, members can access these savings to support their financial needs. SMSFs offer flexibility and control over investment choices, including the potential to purchase investment properties.
What type of property can a SMSF purchase?
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.
Important Information