Purchasing a property with your Self-Managed Super Fund (SMSF) can be a good investment strategy, providing you are able to comply with the strict SMSF rules and regulations. However, it can also be risky and complex to complete and requires specialised advice.

Buying a Property with Your Self-Managed Super Fund in Melbourne Here a property within your SMSF will not only provide you with an income generating asset but it can also be a tax effective investment, particularly in the case of residential real estate. Rental income and capital gains on sale of the property are both taxed at a lower rate (15%) compared to your personal tax rate.

SMSF’s are able to borrow money for investment purposes through a limited recourse borrowing arrangement (LRBA). This provides the same flexibility as public super funds but with the added benefit of allowing you to buy property directly from a developer.

Unlocking Property Potential: Leveraging Your Super for Real Estate Investments in Melbourne

When it comes to investing in residential properties, the key rule is that the SMSF must purchase and own the property for investment purposes only. This means that the SMSF cannot live in a residential investment property, nor can any related parties to the fund. The property must also be rented out to third parties, rather than being used as a holiday home.

If you are considering purchasing a property with your SMSF, we recommend that you speak with a financial planner. They will be able to help you assess whether this is a suitable investment for your unique situation and provide you with the appropriate professional advice.