Self-managed super funds

Self-Managed Super Funds (SMSFs) function similarly to other superannuation funds. Throughout your working life, you contribute to your fund, which is then invested with the aim of growing wealth to be distributed during your retirement.

Thinking about setting up a new SMSF? You certainly can! When you create a new SMSF with help from your accountant or financial planner, you can apply for an SMSF loan. You’ll need to show a record of contributions from your existing super funds and get confirmation from your financial advisor or accountant that your assets are being transferred to the new SMSF.

Regarding property investments, an SMSF can buy residential and commercial properties under certain conditions:

• The property must be purchased for investment purposes and rented out to an unrelated party at market rates.
• The investment should not involve property development or construction, and vacant land is generally excluded.
• The investment must meet the ‘sole purpose test’ set by the Australian Taxation Office (ATO), ensuring the fund is maintained solely to provide retirement benefits to its members.
• The property cannot be bought from, sold to, or lived in by a fund member, their family, or close associates. However, a commercial property owned by the SMSF can be rented to a business owned by a fund member if certain conditions are met and the rent reflects current market values.
• When buying through an SMSF, properties must have a single title per contract. For instance, if you wish to purchase a duplex with two titles sold as one, you’d need to restructure the deal into two separate transactions with individual loans.

If you’re keen on expanding your SMSF investment portfolio or have questions about how an SMSF could benefit you, feel free to contact us today. We’re here to help you navigate the complexities of SMSF property investment and optimise your retirement planning.