Key Advantages of Investing in a Property with SMSF
Investing in property with your SMSF may seem complicated, but there are many benefits. If you are struggling to fully grasp the superannuation system, you can get in touch with a financial planner, broker, or accountant. These professionals can explain SMSF in more detail and help you fully understand the numerous advantages of investing in property with SMSF.
When you go for SMSF loans, you have the opportunity to consolidate your assets with other trustees. This means you can pool all your assets together and increase your investment prospects. In addition, SMSFs offer greater flexibility for multiple members to run a mixture of accounts. There are a lot of positives for trustees, as they can mix their investment portfolio to suit their needs. This allows them to react fast to changes in the market.
Another great benefit of investing in property with SMSF is flexibility. They offer trustees more investment options. In addition to being able to invest in property, trustees can also put money directly into shares, income investments, term deposits and more. They can also borrow funds to buy a commercial premises and residential property. But it is important to remember that residential property is an investment and trustees cannot live in a place owned by their SMSF.
When you operate an SMSF, a person can purchase a commercial property from a member of the group and that member can still use the property. But, an SMSF is not allowed to purchase residential property from a member.
SMSFs, like all super funds, benefit from concessional tax rates. During the accumulation phase, tax on investment income is kept at a minimum. The rate is capped at 15%, making it an attractive option for anyone interested in investments. During the pension phase, there is no tax, that includes capital gains tax. As you transition to retirement, a well-planned strategy ensures your super savings grow and tax reductions remain. Administration costs are also kept low when you use SMSF. The more an SMSF investment grows, the more cost efficient it becomes.
When you read through this article it does not come as a surprise that more and more Australians are choosing to take control of their superannuation by investing in self-managed super funds. There are now well over half a million SMSFs in Australia and the trend continues to grow. A lot of individuals are starting to understand the benefits of controlling their own superannuation.