I have $40,000 in Super - worth setting up a SMSF to buy an IP?

Beanie Girl said:
Can we buy? Can we buy? We have 310K+ in the super fund! :D ;)
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That's more than ample. How many houses you could buy with it depends on proximity to retirement age and your superannuation salary contributions. Have you set up a SMSF (Self Managed Super Fund) as yet?
 
No, we haven't set up an SMSF. Thinking about it but just don't know how to do it :p
For years, we've been told that the costs are prohibitive (is it?) so just shied away
Hubby is like 10 years away from retiring at 59
I'm more :)
 
being closer to retirement age you might consider buying only one or two reasonably priced units in well located areas of Melbourne. Rather than negative gearing look at cf+ to go towards retirement income whilst paying only 15% tax.
 
Ouch! Hubby just sternly corrected me.
He can take out his super at 59 but he can continue working till 65 then can keep working as a casual or fixed term contract beyond 65,
His is the majority of the super, he's the brainy one! :D
He's the tech guru, I'm the property tragic
 
With regards to the original post, I would like to amend my response.

My SMSF had zero dollars when I set it up. However, my SMSF did borrow 100% of purchase price of a comm IP plus costs from me and hence, an SMSF can buy a property with no money in it at all.
 
china said:
With regards to the original post, I would like to amend my response.

My SMSF had zero dollars when I set it up. However, my SMSF did borrow 100% of purchase price of a comm IP plus costs from me and hence, an SMSF can buy a property with no money in it at all.
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Is it legal though?
 
dtraeger said:
Is it legal though?
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I think it is. SMSF can borrow funds to buy property. There are no limitations to what it can borrow as long as the repayments reflect a market rate and is properly documented. I suspect that borrowing at 110% of purchase price plus costs would incur a higher rate and would be impossible to obtain from conventional lenders as it is a non recourse loan. Or so I have been advised by the accountant.
 
Hi china, as the boys are gently suggesting, just be sure to check that indeed it's all legal, and sort out any gaps now. Don't wait till financial year end. If the ATO gets unhappy about something, they can force your SMSF to sell the property right away, wind up the SMSF, and never permit you to have another SMSF again. Hopefully the contract of sale is precisely as it should be and no issues crop up with regards to matters like double stamp duty.
 
I will be proceeding rapidly with finding a good local solicitor who knows something about SMSF. I take on board all the comments that have been made about SIS compliance and will act on it.
 
Good to hear china :)

Rather than find local solicitors and hope they know their stuff about SMSFs, you might be better to use one of the guys from the forums that definitely know their stuff (ie Terry).
 
JacM said:
Good to hear china :)

Rather than find local solicitors and hope they know their stuff about SMSFs, you might be better to use one of the guys from the forums that definitely know their stuff (ie Terry).
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I wouldn't take this on:D
 
JacM said:
Good to hear china :)

Rather than find local solicitors and hope they know their stuff about SMSFs, you might be better to use one of the guys from the forums that definitely know their stuff (ie Terry).
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I appreciate Terry's advice. When I find the appropriate solicitor and go to see him, I will be able to speak more authoritatively to him, channelling Terry's input.
 
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