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Why you should consider SMSF property

Why you should consider SMSF property

By Rich Harvey, CEO, propertybuyer.com.au

The Association of Superannuation Funds of Australia (ASFA) noted in a recent press release that by putting money aside from New Year's resolutions into a super account, the savings can be huge.

For example, kicking the smoking habit by one pack per week could result in as much as $120,000 ending up in a superannuation fund.

But on top of this, you have to plan what you will do with this fund. One option that has proven popular with many Australians is having a self managed super fund (SMSF), and leveraging these funds to get into Australian property investment.

But why should this be a move that is on your radar?

The numbers speak volumes

According to a December 17 release from the Australian Taxation Office (ATO), there are now 29 per cent more SMSFs than there was five years ago - totalling 534,000 and with a combined total of $557 billion in funds between them.

"SMSFs account for 99 per cent of the total number of superannuation funds and 30 per cent of the $1.9 trillion total super assets in Australia," said ATO Assistant Commissioner Matthew Bambrick.

What's more, SMSF borrowings rose from 1.5 per cent in 2009 to 5 per cent in 2013, indicating more people are willing to make the move into using their SMSF for property. This may be due to the tax benefits, wherein the owner of an SMSF property only has to pay 15 per cent tax - even on the rental income.

If you have the money aside in your super, it may be time to come and talk to a buyers' agent about putting it to good use.

Taking advantage of low rates

With the cash rate in such a long period of stability and the Housing Industry Association calling for even lower interest rates, it may be an excellent time to branch out into an investment property. With home prices still rising in Sydney, however, securing a deposit can prove difficult. Speak to a buyers' agent about how you can use your SMSF to get an investment property in Sydney, and we will help you find something to maximise your cashflow.

With such enticing tax breaks on offer, it is important to get the most out of a positive cashflow property bought using SMSF. We at Propertybuyer are Australia's most awarded buyers' agents for a reason - we know where to find the exact property you need. Come and talk to us today, or check out our free reports.

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