If you are considering using super to buy property there is value in seeking financial advice from a professional early on, even if it’s a brief phone conversation.
Correct structuring and good investment selection when buying property in super can ensure a positive cashflow to the SMSF without members needing to make additional contributions.
We work with you to establish the fund and trustee structures, apply for the ABN and TFN, create the investment strategy document and understand the rules. We can also manage the ongoing compliance requirements to assist you in meeting your trustee obligations, organise annual audits, and perform tax returns.
Each investment strategy is different, whether it involves property investment, equities, bonds, private equity, or other asset classes. We explore the available options for achieving your retirement goals, calculate cash-flows, provide recommendations, and advise of appropriateness. We can also establish cash accounts and investment platforms, execute rollovers, close old funds, and help you meet your trustee insurance obligations.
Our in-house property team can assist you with an in-depth financial analysis on selected properties and calculate the true net yield and effect on cash-flow. We can also perform comprehensive property market research, assist with the acquisition process, and ensure your property is SMSF compliant.
Before implementing a geared investment strategy, we will ensure your trust deed allows for borrowing and assess whether the investment complies with your funds investment strategy, the superannuation legislation, and the borrowing rules. We can then recommended the most appropriate loan from a range of SMSF lending providers.
The first step is for us to understand where you are now and have a clear picture of where you want to be and the things that are important to you.
We prepare well-considered plans that draw on a vast array of financial strategies and practical experience to achieve your objectives.
Our connected team of specialists take a collaborative approach to ensure superior outcomes now and into the future.
Yes. If a SMSF holds investment property it can claim all associated running costs as a tax deduction to the fund, similarly to how negative gearing works in an individual’s name. These running costs can include interest and borrowing costs, council rates, insurances, property maintenance, body corporate levies, property management fees, and even the estimated depreciation.
Lenders will generally lend a little less to SMSFs than they might to an individual buyer, due to the extra risk that these loans carry given that they are non-recourse in nature. While different lenders have different limits, a typical lender may lend up to 70% of the property’s value.
No. However, if you don’t already have a SMSF you will incur setup costs, but that doesn’t have to be expensive. It is legal to use your superannuation benefits to pay for the establishment of a SMSF.
Yes. Negative gearing within a SMSF is currently the most tax effective means of investing for Australians. Any rental income earned by your fund’s investment property is usually taxed at only 15%, but this rate can be reduced again with the effects of negative gearing. All rental income is tax free in pension phase, and if you sell the property once you have turned 60 and retired, there is NO Capital Gains Tax on profits generated over the entire life of the asset.
No. All your SMSF investments must be for the sole purpose of saving for retirement, so you can’t buy a property then use it for personal purposes.
Yes. This is a special exception and is a good option for some business owners. By buying a business property through your SMSF, then renting it back to your business at market rates, you can use your business rental costs to build your superannuation balance.
No. Your SMSF is not allowed to buy a residential property from a fund member or any person associated with a fund member such as a friend or relative. If you or another fund member already own a residential property, you cannot transfer it into your SMSF.
No. You cannot rent residential property the SMSF owns to a fund member or any person associated to a fund member such as a friend or relative.
No. There are restrictions on asset type and what can be done with the property. The appropriate trust structure must also be established before a property contract can be entered into. It’s best to discuss your objectives with a qualified Adviser before starting your property search as there are significant penalties if your fund is deemed non-compliant.
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Nexus Private Wealth Management is made up of the following companies: Financial Planning Advice is provided by Nexus Private Financial Planning Pty Ltd – ABN 58 159 649 055. Authorised Representative of Madison Financial Group Pty Ltd (MFG) – ABN 36 002 459 001 (AFSL No. 246679) | Investment Property Advice is provided by Nexus Private Property Servies Pty Ltd – ABN 52 159 828 038 (REA no. 3565454) | Lending services are provided by Nexus Private Lending Services Pty Ltd – ABN 37 169 705 926 (ACL no. 463839) | Accounting and Taxation services are provided by Nexus Private Accounting Services Pty Ltd – ABN 84 169 784 329 (RTA no. 25331778)
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