Who can buy property in super?

Posted In Property Investment | SMSF
30 Mar 2017
Who can buy property in super

The first thing you will need to do to buy property with your super is to establish a Self-Managed Super Fund (SMSF).

To be a member of your own Self-Managed Super Fund you must meet the following criteria:

  • Be 18 years or older,
  • An Australian resident,
  • Not bankrupt, and
  • Have no criminal record relating to dishonesty offences

Balance requirements for a property purchase in SMSF

With the recent changes to the Bank’s lending policies, all members will now need a combined minimum super balance of between around $150,000 to $200,000 to get started or approximately 40% of the intended property purchase price.

For a better understanding of how borrowing within an SMSF differs from the standard home loan, see the article Borrowing within an SMSF: The 3 Major Differences to your Typical Home Mortgage.For specific lending requirements seek advice from an experienced SMSF mortgage broker to calculate your fund’s borrowing capacity.

Who can buy property in smsf?

You can combine Superannuation balances

You can have up to 4 members of an SMSF and effectively pool your resources to buy larger assets. And whilst we usually see a husband and wife team, the four members can be siblings, adult children, friends or really anyone who’s eligible.

Individual Superannuation balances and performances are easy to track

Each member’s relative balance is quarantined within the fund so you’re always able to identify individual balances, even when there’s borrowing involved.

Property inside SMSF can offer income, capital growth and tax deductions. Good investment selection when buying property using your super can ensure a positive cashflow to the SMSF without members needing to make additional contributions. Not all property is appropriate for SMSF.

For a more detailed discussion about property investing using your Superannuation funds, register for a Free SMSF Consult.

This article is an excerpt from The Beginners Guide to Successful Property Investing Using Superannuation Funds, you can download the ebook version here.
Stephen Vick

Written by  Stephen Vick

Stephen holds a Bachelor of Business majoring in Banking/Finance & Accounting, a Diploma of Financial Planning, a Diploma of Finance & Mortgage Broking Management, Specialist SMSF accreditation, a Real Estate Agency License, and is a member of the REIQ. He has spent 20 years in the finance industry and has held State Manager Roles with Australian Finance Group (AFG), Australian Unity, and Lawfund Australia. His last institutional role was with MLC as an advisor to financial planners.

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