As a result of the new borrowing guidelines introduced in 2007, purchasing property as an asset under a self-managed super fund (SMSF) has become extremely popular. The ATOs March 2014 figures show an increase of 129,282 SMSFs between June 2009 and March 2014.
Self-managed super funds can invest in properties directly or indirectly via property trusts. In March of this year it was reported that 15.9% of SMSFs were direct property investments (AMP).
According to ‘Your Investment Property Magazine’, people invest in property through an SMSF for a number of reasons, such as:
- Greater control over superannuation assets;
- Attractive concessional tax structure; and
- Using superannuation as a deposit to purchase property.
A variety of real property can be used for investment such as residential, commercial, industrial and, depending on the circumstances, a farm. Residential property or real estate extends to units, semis & houses, while commercial property can include factory, warehouse and business leased premises. Consider your options and seek professional advice before investing.
AMP reports the benefits of buying through a SMSF include:
- The ability to afford property in your own name;
- Asset protection;
- Significant advantages for business owners, as small business owners may be able to purchase their own business premises and use themselves as a business tenant.
Preston Rowe Paterson offer due real estate diligence acquisition, valuation, property management & leasing, and the sale of properties; all of which are important steps in finding, purchasing, managing and later selling a SMSF investment property. As mentioned above you should always seek professional advice before investing.