Super funds are now able to borrow to buy property… Please Read On!
Recent changes made to the superannuation investment laws mean that, in some cases, Self Managed Super Funds (SMSFs) are now allowed to borrow to acquire property. These changes are sure to be of great interest to those of us who appreciate opportunities and who would like to be able to include real estate in their SMSF’s investment portfolio. The basic features of the arrangement are as follows:As with ‘all things taxation’, the details can be quite complicated. However, the basic requirements are that:
- A trust holds legal title to the property on behalf of the SMSF; and the financial institution can only lend on a ‘limited recourse’ basis. That is, if the SMSF defaults on the loan, the lender does not have any recourse to the SMSF’s other assets – the lender can only make a claim against the property being acquired under the loan. Once the loan is set up and the property acquired:
- The property is rented out, and rents paid direct to the SMSF.
- The SMSF makes loan repayments to the lender and pays all other outgoings in relation to the property.
- When the mortgage is paid out, the property can be retained by the trust or transferred to the SMSF CGT and GST-free… this is not a misprint!
Note: This change can allow an SMSF to acquire a client’s own business premises. In that case, the premises are ‘business real property’ and may be purchased from a related party of the SMSF. However, residential property cannot be purchased from a member of the fund (or an associate), but must be purchased from a party unrelated to the fund, to avoid breaching the ‘acquiring assets from related parties’ rule. Want to know more? YES Call my personal number on 1300 883 618 and/or email me at george@georgemihos.com letting me know that you are serious about obtaining more information and/or attending one of my upcoming workshops.
Remember… Live with Passion & Take Massive Action… or go and build an ant farm… either way, I dare you!
With Ethics and Passion – George Mihos
Please Note: Many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances. www.georgemihos.com The destination for financial intelligence, investment education, mentorship and Peak Performance Coaching for ordinary people determined to achieve extraordinary financial freedom and Results… AND once again - before I go on as always, I’m not offering any financial advice; you should always get qualified professional advice when making financial decisions. What I am doing is letting you know what has worked for me and what I may be looking at and giving you the opportunity to check it out for yourself.
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Speaking of which, why not check out this opportunity …
60 acres of level farming land for sale in Tarrington, a small town only 6kms outside the city of Hamilton, Victoria.
The beautiful tidy town of Tarrington has sporting facilities (large oval and tennis courts), fully licenced and profitable Cafe Catalpa, reputable primary school and large church with a high spire beautifully lit up at night. It is no wonder that young families are flocking to this area.
The property for sale is on the edge of residential zoning, is bounded on two sides by roads that carry services, has a large dam and tree shelter belts for stock … AND … is on it’s own title - ideal for property development, subdivision, pending council approval. Country setting with views of The Grampians (only 20 min drive) and a nearby trotting track for the horse enthusiast. Wireless broadband is available through Westvic Broadband with massive govt subsidies for first timers to broadband.
ACT NOW, as this won’t be around for long. Contact Helen Morrison or Warren Clark at Lanyons Real Estate on (03) 5572 2018, mobile 0418 106 240, email lanyons@datafast.net.au
Est Price $250k.