Self-Managed Super Funds & Property

Using your super fund to buy property, is this the right strategy for you?

There are now approximately one million Australians that are invested in a Self-Managed Super Fund (SMSF). Members around the country are leveraging from the benefits available through SMSFs. While a SMSF may not be suitable for everyone, many Australians have discovered that investing in direct property within their SMSF can offer substantial savings through tax advantages and access to a larger pool of funds.

The Benefits Using Your Super to Buy Property:

  • Tax Savings – By using your super fund to buy an investment property, the property income will only be charged a maximum tax rate of 15% and the capital gains tax is reduced to 0% when you sell the property in pension phase
  • Deposit – Utilise your existing super balance to fund the deposit for the property
  • Leverage – You can borrow up to 80% of the value of the property within your superannuation

Enquire to register your interest or arrange a complimentary appointment with one of our SMSF specialists.


How To Use Your Super Fund To Buy Property?

You’ll need a specialist such as Property Thru Super, to set up a Self-Managed Superannuation Fund for you. Once your Self-Managed Super Fund is established you can utilise your existing superannuation balance as a deposit into direct property. As of 2007 you can even borrow through your super. Example of Financial Benefit

Brad and Wendy are a husband and wife in their early 40’s earning a combined income of $200,000 and combined super balance of $200,000.* They would like to purchase an investment property and initially were going to purchase the property outside of their super until they learnt the financial benefits of purchasing the property inside of their super fund. See table.

To learn more and find out whether a Self-Managed Super Fund and Property is the right strategy for you, simply register your interest or contact us about our complimentary obligation free appointment.

Purchase Price (Investment Property)$400,000$400,000
Deposit (Price)$120,000$120,000
Total Income Needed To Fund Deposit (Factoring In Income Tax)$190,476$141,176
Loan (15 Years)$280,000$280,000
Total Loan Repayments (15 Years At 6% Interest Rate)$ 425,340$ 425,340
Total Income Required To Meet Loan Repayments (Factoring In Income Tax)$675,143$500,400
Total Cost$865,619$641,576
Total Cost Difference+$224,043
Property Value (15 Years At 5% p.a.)$831,571$831,571
Total CGT Difference$104,760$0
Total Potential Financial Benefit (if property is sold in pension phase after age 60)+$328,803 </p> <p>

*Please note that these are rounded and example numbers, not exact figures. Personal, market and legislative factors and changes will have an effect on your outcome. It is recommended you seek personal specific advice for your situation.


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