Is SMSF Property Investment Worth It?

For experienced property investors with self-managed super funds, investing in property using this fund is a no brainer. If you just recently opted to switch your superannuation account to a self-managed fund, you may be wondering whether using this fund to invest in property is worth it. In this article, we will discuss the pros and cons of doing so to help you determine if it’s the right choice for you. 

Advantages of Investing in Property Using Your SMSF

There are a number of benefits of investing in property using your self-managed super fund. This benefits include:

• Being able to use the rental income generated by the property to increase your retirement savings
• The rental income from an SMSF property is taxed at only 15%. 
• If you own the property for at least a year before you sell it, then only ⅔ of the capital gains you earn is taxed at 15%. 
• Any expenses for owning and maintaining the property are tax deductible, which can also increase your retirement fund by saving you money. 

Disadvantages of Investing in Property Using Your SMSF

There are also some disadvantages of investing in property using your SMSF, which mostly have to do with the restrictions placed on these properties:

• You cannot purchase the property from another member of their relatives.
• You, other members of the fund, or their relatives cannot live on the property. 
• You cannot rent to your family, members of the fund, or their relatives. 
• You also cannot improve the property in any way until the loan is paid off. 

If you’re interested in investing in property using your SMSF, the experts at Mortgage House can sit down with you, look at your fund, and help you decide if it’s the best solution for you. 

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