Buying Property in an SMSF – A Smart Investment
Investing in property through an SMSF offers tax benefits and greater control, but understanding the rules, costs, and risks is crucial.
Benefits of Buying Property in an SMSF
✅ Tax Advantages – Rental income is taxed at 15%, and capital gains may be reduced to 10% if the property is held for over a year. Learn more at Revenue NSW.
🏡 Control Over Investments – An SMSF allows you to directly manage your investment choices and align them with your retirement goals.
📈 Potential Growth – Property can provide long-term capital appreciation and rental income, contributing to your retirement wealth.
Key SMSF Rules & Considerations
🔹 Sole Purpose Test
📌 SMSF properties must solely provide retirement benefits to fund members. They cannot:
- Be purchased from a related party
- Be lived in or rented by fund members or their relatives
👉 Read the full rules on MoneySmart
🔹 Borrowing Restrictions
💰 SMSFs can borrow to purchase property under a Limited Recourse Borrowing Arrangement (LRBA), but:
- Borrowed funds cannot be used for renovations.
- Improvements must be funded from existing SMSF resources.
👉 More on SMSF borrowing – CPA Australia
🔹 Diversification Risks
📉 SMSFs should avoid investing too much in a single property, as this increases financial risk. Diversification helps:
- Balance returns
- Reduce risk exposure
- Improve long-term fund stability
What Does It Cost to Invest in Property Through an SMSF?
Upfront Costs
Stamp Duty – A tax on property purchases.
Legal Fees – Costs for conveyancing and contracts.
Advisory Fees – Financial and SMSF setup advice.
Ongoing Expenses
Property Management – Fees for leasing and maintenance.
Maintenance Costs – Repairs and upkeep expenses.
Insurance – Landlord and building insurance.
Compliance Costs
SMSF Audits – Required annual compliance checks.
Admin Fees – Fund management and reporting costs.
Ongoing Reporting – Regulatory obligations to remain compliant.
Our SMSF Property Services
Expert Property Search
We identify SMSF-compliant investment properties.
Access to on-market and off-market opportunities.
Tailored searches to match your financial goals.
Due Diligence & Compliance
We assess property suitability for SMSF investment.
Conduct rental yield and growth analysis.
Ensure compliance with ATO and SMSF regulations.
Negotiation & Acquisition
- We negotiate the best price on your behalf.
- Handle contract reviews and settlement coordination.
- Ensure a smooth transaction process from start to finish.
