If you haven’t considered
using superannuation to buy a house
, you may be missing out on an investment that can promise long-term growth and a valuable source for your retirement. Changes in super regulations have allowed people to use their Self-Managed Super Funds (SMSFs) to borrow to invest in assets like property. You can establish an SMSF and leverage it to grow your assets and successfully set yourself up for the ultimate goal of a comfortable, early retirement. Many Australians are seeing the benefits of purchasing property as a long-term investment, but what they don’t know is that there are greater advantages to purchasing these properties through a SMSF. Not only can you leverage your super to borrow for this asset, banks and lenders are more likely to give you more money for an investment of this magnitude. Using superannuation to buy a house can give you borrowing power of up to 70% of the total amount. Better still, properties purchased inside your SMSF only incur a tax penalty of 15%. Properties purchased outside of your SMSF can incur up to 46.5% in taxes so the benefits of such an investment are obvious.When using superannuation to buy a house, your SMSF is responsible for all costs of the property including deposit, up-front costs, ongoing maintenance, so there are no out-of-pocket expenses. These costs come out of your SMSF and payments such as rent go in. Should you decide to sell your property once you reach pension phase, you incur absolutely no Capital Gains Tax.
If you have other assets inside your SMSF, they are protected from creditors and insolvency. Your lender has legal recourse only regarding the property for which they have loaned – they have no legal recourse over your other assets. If you don’t have enough to purchase property outright with your SMSF, we can advise you about installment warrants and help guide you through the investment process safely so you can successfully set yourself up for retirement. If you’re serious about your financial future and its stability, you should consider using superannuation to buy a house. Actively engage with your super fund today and determine your own financial future.