What is an SMSF loan?
An SMSF loan is a property loan used by a self-managed super fund (SMSF) to buy investment property. They have become a very common loan type in recent years with the increasing popularity in Australia for more and more individuals taking control and managing their own superannuation. The returns on the investment – whether that’s rental income or capital gains – are funnelled back into the super fund, increasing your retirement savings.
Investing in property within superannuation is not quite as straightforward as investing outside the superannuation environment with a property investment loan. All investments need to be in the best interests of fund members and in accordance with the laws around SMSF borrowing, for instance, any property investment should have an income stream and realistic prospects for capital growth.
Self-managed super fund property rules
- Must meet the ‘sole purpose test’ of solely providing retirement benefits to fund members
- Must not be acquired from a related party of a member
- Must not be lived in by a fund member or any fund members’ related parties
- Must not be rented by a fund member or any fund members’ related parties.
(SMSFs and property) -SmartMoney.gov.au
Getting financial advice
The right kind of financial advice can really make a big difference and help you with planning and strategy for making potential investments and planning retirement. Financial advice can give you confidence that your future plans are realistic and achievable. If you’re not on track to achieve your goals, early advice can help you put the right strategies in place, or come up with more realistic goals. Our division at Best Wealth Creation can assist you with advice with SMSFs and making decisions to purchase property.
The benefits of seeking financial advice can include:
- Set and achieve your financial goals
- Make the most of your money
- Get any government assistance you’re entitled to
- Feel more in control of your finances and your life
- Avoid expensive mistakes
- Protect your assets
Financial Advice and Setting up
To enquire about setting up an SMSF you can contact our Financial Planning side Best Wealth Creation at our Townsville office on 07 4779 0555.
Best Wealth Creation Pty Ltd and Jeminna Best are authorised representatives of Synchron, AFS Licence No. 243313