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Did you know you can purchase an Investment Property with your SUPER?

As an Australian, you may already be aware of the benefits of investing in property.

However, did you know that you can use your superannuation fund to purchase an investment property?

Below, we will explore the process of using your Self-Managed Super Fund to buy an investment property, as well as the many benefits that come with this approach that thousands of Australians are already doing.

For 11 years, Investors Choice Group have been helping our clients with the process of setting up a Self-Managed Super Fund and then helping them to purchase the right property that fits the criteria for the banks and rules for Super Funds.

What is a Self-Managed Super Fund?

Firstly, it's important to understand what a self-managed super fund (SMSF) is.

An SMSF is a type of superannuation fund that allows you to manage your own super investments.

This means you can choose the specific assets you want to invest in, including property.

Using an SMSF to buy an investment property

Investors Choice Group helps you navigate the steps you need to follow to use your SMSF to purchase an investment property.

  1. Establish an SMSF: Firstly, you will need to establish an SMSF, which will require setting up a trust deed and appointing trustees. Investors Choice Group will introduce you to the right financial planner or SMSF specialist to help guide you through the process. Not all financial planners can help with property. It is a specialist area.

  2. Set up a separate bank account: Once your SMSF is established, you will need to set up a separate bank account for it. All contributions and investment returns must be deposited into this account.

  3. Roll over existing super balances: If you have existing superannuation funds, you can roll these over into your SMSF. This will provide you with the necessary funds to purchase the property.

  4. Purchase the property: Once you have the funds available, you can use your SMSF to purchase the investment property. You will need to ensure that the property is bought in the name of your SMSF, not your personal name.

  5. Manage the property: As the trustee of your SMSF, it will be your responsibility to manage the property, including finding tenants, collecting rent, and ensuring that the property is properly maintained.

Benefits of using your SMSF to buy an investment property

There are many benefits to using your SMSF to purchase an investment property.

Here are some of the key advantages:

  1. Tax benefits: One of the main benefits of using your SMSF to buy an investment property is the potential tax benefits. Rental income earned from the property is generally taxed at a maximum rate of 15%, and if the property is held for more than 12 months, any capital gains made on the sale of the property will also be taxed at a maximum rate of 15%.

  2. Diversification: Investing in property can provide diversification to your SMSF portfolio, as it will not be solely reliant on shares or cash investments.

  3. Control: As the trustee of your SMSF, you will have greater control over your investments and can make investment decisions that align with your specific investment goals.

  4. Capital growth potential: Property has the potential to appreciate in value over time, providing capital growth to your SMSF portfolio.

  5. Income stream: If your investment property is positively geared, meaning the rental income exceeds the property expenses, this can provide a regular income stream to your SMSF.

Using your SUPER fund to buy an investment property can be a smart investment strategy for those looking to diversify their investment portfolio and take advantage of the many tax benefits available.

However, it's important to seek professional advice before making any investment decisions, as property investment can be complex and requires careful consideration. With the right guidance, investing in property through your SMSF can be a lucrative investment option for your future.

If you would like to learn more about how you can purchase an investment property with your superannuation fund, then contact Investors Choice Group today and one of our friendly team members will be more than happy to help.

Email Steve Scott direct on

Investors Choice Group: The Property Choice, Finance Strategy & Capital Growth Specialists - Speak to us today.

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