Key Advantages of Buying Property through Super
- Can purchase a single property, and or multiple investment properties.
- Can borrow.
- Greater purchasing power and ability to diversify extensively compared to a standard retail super fund.
- Can have up to 4 members in the fund when acquiring property.
- Deductible expenses, such as incurred property manager fees and lenders finance.
- Can have income protection, life and tpd cover in the trust for asset protection purposes.
- You may have a larger super balance at retirement that allows a well diversified fund.
- Attractive strategies available for high income earners.
What is a Limited Recourse Borrowing Arrangement when Buying Property Through Super?
- Money borrowed is used to acquire a single asset or group of identical assets.
- An acquired asset is held in trust and the SMSF receives beneficial interest and right to acquire legal ownership by making one or more payments.
- The lender and or any other person has limited recourse against the SMSF trustee and the amount that can be recovered is limited to the value of the acquirable asset.
- The asset is one that can be acquired by the SMSF when buying property through super.
Steps For Borrowing when Buying Property Through Super
- The SMSF Trustees formally agree to the use of a borrowing arrangement.
- You need to arrange for the SMSF trustee to meet and appropriately minute the agreement to use a borrowing arrangement.
- Decide which asset to purchase in line with the fund’s investment strategy.
When Buying Property Through Super
- Make sure your SMSF’s investment strategy allows for borrowing arrangements.
- Decide on which assets to purchase with consideration to the investment rules within SMSF’s.
- Establish the Custodian Trust in order to purchase the asset.
- Arrange finance through an appropriate lender.
- Arrange the relevant loan documentation when buying property through super.
- At Wealth Wyse, our borrowing arrangement documentation can help you acquire property and finance effectively.
If your interested in buying property though Super you will need a SMSF specialist adviser to do all the work for you.
At Wyse Wealth we will advise you on how to acquire property. Call us today on 1300 850 902, alternatively leave your contact details below and we’ll call you!