Why Are People investing in Property with an SMSF


Many people regard property as a safe investment amongst many other commodities, and even though the property market may quickly transform, if selected wisely, property can provide a decent capital return.

Also, it is a lot easier to comprehend and administer a property when compared to other commodities, for instance, shares or bullions. If after doing the homework you are now confident that purchasing a property will offer up both capital growth over the long-term, and routine rental income, then perhaps you should consider a SMSF. By obtaining an investment property as a part of your SMSF there are other advantages, such as:

The Creation of a Property Portfolio 

Actually seeing a building which is part of your very own SMSF, gives you a connection and a feeling of pride, due to that property having your money in it. You appreciate the feeling of watching the building in front of you as a symbol of how your very own super is functioning. You don’t need to rely anymore on any annual statements from your super provider to appraise your fund’s performance. SMSF loans will certainly assist you in creating a property portfolio.

Potential Rental Revenue 

Although the rental market may happen to change with time, usually property is a safe investment and any time your property is leased you’re getting revenue from it. Think about selecting an investment property that suits the most number of potential tenants, which will ensure a regular income for you when rented.

Tax Advantages

There are important advantages when owning a property in an SMSF, which includes tax – your super fund will be taxed at a mere 15 per cent, which is a lot lower than many people’s personal tax rates.

A Different Method of Using Your Super 

Conventional super companies collect money for themselves from your finances. There is another way to do this and that is to use the cash in your super account as a deposit for purchasing an investment property.

Capital Development

This has to be one of the major reasons for people to invest. In spite of paying capital gains tax on the raised value of the property, if you choose to sell an investment property, it may still be advantageous if it’s still part of your financial strategy.

Savings on Capital Gains Tax 

This is yet another very popular reason why many people choose to invest in property inside an SMSF. If a property happens to be sold during the accumulation phase, the capital gains tax is figured out at a discounted rate. But, should the asset get sold while the super fund is in the pension phase, it is tax free. This simply means, that you can sell off your property, make some profit and then collect all the finances because you are not required to pay out any capital gains tax (CGT), after retirement.

Now you can see just why more and more people are investing in Property with an SMSF!