Investing in property with SMSF

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Article supplied by DHA Australia. 10/10/2015
A growing number of Australians are opting to take control of their retirement savings through self-managed superannuation funds or SMSFs. These funds allow trustees to make individual decisions about the types of investments they include in their superannuation portfolio. It also offers attractive taxation concessions to help build retirement savings.

To be responsible for a SMSF is a complex and challenging task, but with commitment, knowledge and the right advice, the astute Investor has the potential to reap immense financial rewards.

SMSFs deliver opportunities to accelerate financial growth and protect the value of your most important life investment—your retirement savings.

SMSF and investing in property
Rental earnings fed back into a SMSF are not counted as superannuation contributions, so you can boost your retirement savings balance well beyond regular contribution limits. And, as superannuation investment earnings are taxed at a maximum rate of 15 per cent, they provide an avenue to quickly increase the value of your retirement nest egg. However, if your rental earnings are applied against a loan, your savings may not increase until the loan is repaid in full.

Why property?
The saying, ‘as safe as houses’, certainly rings true when it comes to superannuation. With a SMSF, trustees not only have complete control over property purchase decisions, but can take advantage of concessions such as reduced tax on rental income and future capital gains. But what about the risks? Property investment has some pitfalls and is vulnerable to economic trends, so SMSF trustees might want to seek a secure, low-risk property investment option.

Defence House Australia investing
For a secure property investment, those setting up a SMSF should consider investing with Defence Housing Australia (DHA). DHA sells investment properties with a lease-back arrangement, and they’re backed by the Australian government.

As a DHA investor you receive guaranteed rental income1, long-term leases (up to 12 years) and annual valuation and rental adjustments. Rent is accrued daily and is paid monthly in advance, directly into your bank account and is even paid if your property isn’t occupied.

Put simply, DHA provides Australian SMSF investors with a property management service that is not only competitively priced, but offers something money can’t buy—a secure financial future.

Get the right advice
Borrowing money or gearing your superannuation into residential property must be undertaken via strict borrowing conditions called a ‘limited recourse borrowing arrangement’. So, make sure you plan ahead and seek professional advice before setting up your SMSF. That way, you will get the most from the tax concessions and allowances available to you and can be confident that you are abiding by the associated rules and regulations.

For most business owners, making money is the key priority. With a SMSF that includes safe, low-risk property investments like those offered by DHA, you can get your assets working to their full potential and look forward to a financially secure and hassle-free retirement.
 
Learn more about investing with Defence Housing Australia or enquire online
 
The advice contained in this article is for general information only and should not be taken as financial advice. Investment is subject to DHA’s lease terms and conditions of sale. Investors retain some responsibilities and the associated risks include property market fluctuations. Prospective investors should seek independent advice. 1. Rent may be subject to abatement in limited circumstances.

Disclaimer: while due care is taken, the viewpoints expressed by contributors do not necessarily reflect the opinions of Your Investment Property.

 

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