Yellow Brick Road Wollongong we know that super in invaluable so it need not sit idly in your super fund. And you needn't feel like
your super is untouchable. A particularly popular method for taking control of
your super is to put it into a self managed super fund and then use those funds
for your own investments. You may want to consider buying property with your
super, for instance. Here's what you need to know.
Buying property with super
It is possible to use your superannuation
as equity to purchase property by having a self managed super fund. It’s
particularly popular these days. This is due in part to the concessional tax
benefits and the attraction of being in greater personal control of your super.
Think carefully about the cost
While the benefits of self managed super
funds are clear, remember there are costs involved in setting up your SMSF and
maintaining it. With a SMSF, you need to be on your game: think tax time,
keeping records, administration and audits.
The rule on renovations
Self managed super funds come with rules.
For instance, you can’t borrow with the intention to construct a new investment
property. And if you’re hoping to undertake renovations for profit, think
again. There are strict rules about the types of repairs and improvements.
What’s this arms length business?
One of the serious rules regarding equity
and super is that the purchase of property must be at ‘arm’s length’. By this,
the Australian Tax Office means you cannot benefit from the property directly
until you formally retire. So, you can’t live in it.
Get an expert on your side
Self managed super funds are more and more
popular, but they are also complicated. Having a financial planner's support
with research and decision-making about your SMSF will ensure you're aware of
all the necessities and relevant laws as you embark on using your super as
equity. You can always speak to one of our friendly advisors at our local YBR
Wollongong branch for assistance.
the end of the day, managing your super properly can make the world of
difference to your savings, so make an appointment today with your local Yellow
Brick Road Wollongong today and find out how you can save for tomorrow.