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.
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.