Su­per spend­ing

Once es­tab­lished, a SMSF prop­erty could be a per­fect, long-term match – but do your home­work

Weekend Gold Coast Bulletin - Property - - NEW HOMES -

IN MY opin­ion, pur­chas­ing prop­erty for Su­per has been made de­lib­er­ately com­plex by the Gov­ern­ment to en­sure that our im­por­tant su­per­an­nu­a­tion funds are not frivolously wasted away and we do not use this al­ter­na­tive in­vest­ment method as a ve­hi­cle for tax avoid­ance.

I will add that I do be­lieve the rea­sons for its com­plex­ity make eco­nomic sense.

Ac­quir­ing res­i­den­tial prop­erty us­ing your su­per­an­nu­a­tion is not an easy process, nor is it the right choice for ev­ery­one. If you’re con­sid­er­ing it, you need to seek pro­fes­sional in­de­pen­dent ad­vice from the start.

Over re­cent years I have dis­cussed this topic with many pro­fes­sion­als, in­dus­try ex­perts and had per­sonal ex­pe­ri­ence of the process.

From what I can gather, un­less you have at least $250,000 to $300,000 in your su­per­an­nu­a­tion – that can be you and your part­ner’s bal­ance com­bined – it is not an op­tion worth pur­su­ing.

It’s not cheap. Ex­pect to spend $3000 up­wards on es­tab­lish­ing your Self-Man­aged Su­per Fund and then sev­eral thou­sand more in other fees. Fur­ther, there will be added costs as your fund has to be au­dited an­nu­ally.

You can­not live in the prop­erty, rent it to your fam­ily, or hol­i­day in it. And you can­not buy a prop­erty from a mem­ber of the fund or an as­so­ciate of any mem­ber.

The only place to go is an in­de­pen­dent pro­fes­sional, ac­cred­ited and li­censed ac­coun­tant.

Yes you will pay for this ad­vice, but they should get it right and have a an un­bi­ased view. I also sug­gest go­ing to the bank di­rectly and shop­ping around for their terms.

Rates are typ­i­cally higher and loan es­tab­lish­ment fees are gen­er­ally al­ways charged. The size of the de­posit is gen­er­ally a min­i­mum of 20 per cent and it will be in­suf­fi­cient to have only the de­posit amount in your fund.

While this Su­per in­vest­ment op­tion is ini­tially an ex­pen­sive and com­plex one, once es­tab­lished, your SMSF and the prop­erty could be a per­fect match for you over the long term. But do your re­search.

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