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Buying a Property with SMSF (Self-Managed Super Fund)

Many people don’t realise that Self-Managed Superannuation Fund investments can be more than just stocks and bonds. While these types of securities can be great for producing consistent returns, there are other ways to grow your portfolio.

One of those methods is SMSF property investing, which means using your retirement savings to purchase income-producing real estate.

Monarch Real Estate specialise in SMSF property investing. They illistrate a simple blueprint for using SMSF investments to finance the development of real estate.

Currently, SMSF Investors cannot invest in properties with a two-part contract, which limits their investment options. Through Monarch we bypass that problem by entering a two-part contract with the builder, while the investor enters a one-part contract using them.

A ground-breaking solution to purchase all types of brand new home AND land packages and NDIS properties in superannuation!

HOW SMSF PROPERTY INVESTMENT WORKS?

Step 1

The buyer (SMSF) selects the location, the land, the builder, and negotiates the purchase price.

Step 2

The buyer (SMSF) pays a 35% deposit and enters into a contract. Monarch and a affiliated companies acquire the land and oversee the construction of the property to ensure it’s completed to the correct specifications as well as ensuring deadlines for build time are upheld.

Step 3

Upon completion, the buyer (SMSF) pays the 65% balance. The land is transferred to the buyer (SMSF) and the sale is finalised with the SMSF now owning the investment property completely.

Benefits to investing within your super

Buying a house through your super is a tax-effective investment strategy.

Buying a house through your super can be a tax-effective investment strategy. Any rental income earned on the property is taxed at a concessional rate of 15%, compared to the standard marginal tax rate which can be as high as 47%. Additionally, if the property is held for more than 12 months, any capital gains made on its sale are taxed at a maximum rate of 10% within the superannuation fund, compared to a maximum rate of 23.5% outside of super. This tax concession can lead to significant long-term savings.

diversification of your superannuation portfolio.

This can help to spread risk and reduce the impact of market fluctuations. Property is an asset class that typically performs differently to shares and other traditional forms of investment, and therefore can provide a useful way to balance your overall investment portfolio.

Owning a property within your super provides control over your retirement income

By owning a property outright, you can avoid the need to pay rent in retirement, reducing your living expenses and increasing your disposable income. Additionally, you have the flexibility to choose when to sell the property and access the funds within your super, allowing you to manage your retirement income according to your individual needs.

Investing in property through super creates certainty through building a tangible asset that increases in value over time.

This can be particularly appealing for those who are interested in property investment and enjoy the hands-on process of selecting and managing properties.

Reduce Your Capital Gains Tax

When a property is sold within a superannuation fund, the CGT is calculated based on the capital gain made on the property’s sale. However, the CGT rate is significantly lower for superannuation funds than for individual taxpayers outside of super. In particular, for properties held in the accumulation phase, the CGT rate is 15%, while for properties held in the pension phase, the CGT rate is 0%. This means that if you sell a property within your superannuation fund that has been held for more than 12 months, you can pay 0% CGT if you are in the pension phase or over 67 years old.

Purchasing a house in your superannuation fund provides the opportunity to pay 0% capital gains

This can lead to significant long-term tax savings, making it an attractive investment strategy for those seeking to maximise their retirement savings. It is important to seek professional advice and consider your individual circumstances before making any investment

contact us

Please contact us to find out how you can start your property investment journey through your super and claim all the tax benefits. We are happy to assist you with any questions or queries you may have.

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Testimonials

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Selling my home with Terry from Monarch Real Estate was an outstanding experience. His market knowledge and expert negotiating skills helped me get the best price for my property. He also provided excellent communication and guidance throughout the entire process, making it a smooth and stress-free experience. I couldn't have asked for a better agent and I would highly recommend her to anyone looking to sell their home.

by Roy

Kyle from Monarch Real Estate was an absolute pleasure to work with. From start to finish, he was incredibly professional, knowledgeable, and dedicated to ensuring that I had a successful sale. He provided me with valuable advice and insights, and his attention to detail was second to none. I am so grateful for his hard work and would highly recommend him to anyone looking to sell their property.

by Kenya

If you're looking for a top-notch real estate agent to help you sell your property, look no further than Dean from Monarch Real Estate. He not only has a deep understanding of the real estate market, but he also has a genuine passion for helping his clients. Throughout the entire process, Ray was always available to answer my questions and provide valuable insights. Thanks to his hard work and expertise, I was able to sell my property quickly and for a great price. I highly recommend Dean to anyone looking to sell their home.

by Kathleen