SMSF Borrowing To Buy Property
Your self-administered super fund or SMSF pays down payments, upfront costs, and property operating expenses so you don't pay anything out of pocket. can usually borrow up to 80 percent for residential property and up to 70 percent for commercial property – different rules apply to everyone.
You cannot live on the property, but in certain cases, you can rent a property and make payments directly to your SMSF. Why would you want to use super: your retirement ticket? Straight.
If you are one of the many smart Australians who know real estate is stable, you will be interested that it costs a lot less and it is much cheaper to buy property in a self-managed super fund. Wouldn't you rather pay a 15% tax than up to 46.5% by using SMSF tax return services in Australia?
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The property itself is paid for via your SMSF as it generates income through rent and inflation and is ultimately turned into positive cash flow. Meanwhile, your property will grow and you will continue to make money until (and if) you decide to sell it.
Using an SMSF loan to buy property is a smarter decision. Before retirement, capital gains and rent made by your SMSF on your property are subject to a tax of only 15% and reduced to 10% if the property is owned for more than 12 months.
Better yet, if you sell your property after you retire or keep it after you retire, you won't pay any capital gains tax at all.