Self Managed Superannuation Fund

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From: Ron Riedell


Does anyone know how to invest in property from a Self Managed Super Fund (SMSF)?

I know that a SMSF cannot borrow and cannot be associated with a mortgage but I have heard that some people use a Trust of some kind. I suppose that the people in the trust must borrow against another property, not the one being invested in by the SMSF.

Can anyone tell me where to get advice?
 
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Reply: 1
From: Dale Gatherum-Goss


Hi

The best place to get advice on these issues is your accountant.

It was very common for people to establish their own self managed superannuation fund and then have that fund invest in units in a unit trust that they also control.

This way, the SMSF has made a legal investment. The U/T then uses that money as a deposit and buys a rental property using the normal borrowings of a bank.

Assuming there is a profit in the U/T at the end of the year, that profit is distributed back to the fund and so taxed at only 15%.

Very nice, thank you!

I hope that this helps.

Dale
 
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Reply: 2
From: Terry Avery


The rules for DIY super funds were changed. You can no longer use a trust to
borrow money and then have the super fund buy units in the trust. The super
fund can buy IPs with cash only so you must have enough for the fund to buy
IPs. Also as trustee you have a legal obligation to ensure that all
investments are sound (read conservative). If the property does well then no
problem but if not then the ATO may look unkindly at your trusteeship. This
is a specialist area and you should be talking to an accountant that
specialises in this area.
 
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Reply: 2.1
From: Scott Marshall


So I have 50K in my Super, I start a SMSF and buy a block of land. Can I invite investors (myself) to build on this land? That is, can the super fund be a part owner of a property. Then, after 15 years, the SMSF sells the land...to the investor, being myself AT ORIGINAL COST. The fund then makes a paper loss (due to inflation only) and I have instant equity. It IS my money after all.
Scott
 
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Reply: 2.1.1
From: See Change


My understanding is that all transactions between your self and your superfund have to be done on a commercial basis , and you would need valuations to justify the sale prices.

Am planning on buying a commercial property we own ( via mortgage ) into our super fund . Have enough in fund to pay out mortgage but not enough to get up to market valuation . Have discussed delayed settlement as a way to pay for some of this with some members of forum and am in process of getting accountant to check whether this is ok.

see change
 
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Reply: 2.1.2
From: Sergey Golovin


All those loud speeches from the bandwagon...about future of our nation...

So much to "Care for our elderly..."

They did give'm free travel pass and took all their properties away.

Thank you for letting us know now, at least we can "realign" everything before it is too late.

Serge.
 
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Reply: 2.1.1.1
From: Paul Zagoridis


Get advice from a specialist in this area. In the meantime...

The relevant issues were introduced in SLAB4 (Superannuation Legislation Amendment Bill No. 4)

Superannuation funds are prevented from investing more than 5% of their assets in any "related party" investment. Exemptions to this rule impose the same restrictions on the closely-held entity as are imposed on the fund.

One interesting exemption to the 5% rule is for acquisition of real property from a related party where the real property is used wholly and exclusively in a business of the related party. This is the area where See Change has some room for investigation.

Paul Zag
Dreamspinner
Oz Film Biz is at
http://www.healey.com.au/~paulz
 
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Reply: 2.1.3
From: The Wife


I thought that super funds could thru a unit trust lend money for a particular project, but not to yourself, or any family member? maybe Im wrong?

TW
~Life is a daring adventure, or nothing at all~
 
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