Use your self managed super fund to purchase investment residential property with a super fund loan

With changes to superannuation legislation, your self managed super fund (SMSF) can now borrow to invest in real estate. Accelerate wealth accumulation and diversify your investment portfolio by using a super fund loan to purchase investment residential property.

1. Unlock cash for investment purposes

2. Diversify your SMSF investments through the purchase of property

3. Use rental income to assist in repaying the loan

4. Negative gearing benefits – offset loan interest and expenses against rental income

5. Income tax benefits – concessional tax rates apply for income after expenses

6. Limited recourse – all other assets of the SMSF are protected

Who will benefit from this strategy?

Those with a self managed super fund or planning to establish one

Those wanting to purchase investment residential property using their superannuation fund

Those with a long-term investment timeframe

How does it work?

You are looking to set up a self managed super fund (SMSF) or currently have one. After obtaining financial advice, you decide to borrow to invest through your self managed super fund. Your SMSF appoints a Security Custodian to purchase investment residential property on its behalf, as security for the loan. The SMSF contributes cash to pay the deposit and to meet legal costs and stamp duty. The SMSF then manages the property in the same way as any other real estate investment. The property is held in trust and the legal title is either transferred to the SMSF when the loan has been repaid or the property may be sold.