Buy Property in Your Super Fund

Following changes introduced to superannuation laws in 2007, SMSF’s can now borrow money in order to purchase an investment asset. As a result, the ability of an SMSF to purchase direct property is no longer out of reach.

However, before embarking upon a property purchase, you need to be aware of both the strict set of rules that apply and process that needs to be followed for this strategy to be successful. Remember  that there are additional costs involved with the setup of the borrowing arrangements.

We have successfully guided our clients through this process on a number of occasions. Some examples of where we have implemented this strategy for clients include:

• Business Real Property already owned by related party
  Several clients were operating businesses out of properties they owned through another entity. Some of these properties were owned outright, whilst some were mortgaged. Although the properties were owned by a party related to the SMSF, we utilised the Business Real Property exemption to successfully transfer ownership of the property. A property held within the Fund into pension phase can be sold upon retirement tax free.

• New or Existing Commercial Property
  We have successfully assisted business owners purchase a new or existing commercial property. These have occurred both on and off market, and were subsequently occupied by the related business allowing business rental to be paid to the owners SMSF rather than a third party.

• Commercial or Residential Investment Property
  Other clients who are passionate about property investments have successfully purchased commercial and residential investment properties within their super funds. These are subsequently leased to non related third parties.

In all cases we have worked closely with these clients well in advance of the actual purchase date to ensure the purchase within their SMSF was not only successful, but was also compliant and the right strategy for them.

If you are interested in acquiring property within an SMSF, we would be more than happy to meet with you obligation free to discuss the process and ascertain whether this is the right strategy for you.