Exploring the Advantages of Borrowing to Buy Property in a Self-Managed Super Fund (SMSF)
Assets in Self Managed Superannuation Funds have increased steadily over the last 20 years to be approx. $900bn in 2023-24. Investing in property through a Self-Managed Super Fund (SMSF) has gained significant traction among investors seeking to diversify their retirement portfolios and business owners looking to acquire their office or factory.
One of the key strategies within this approach is borrowing to buy property within the SMSF. WLP has had a lot of recent success with fast approval, competitive lender pricing and good turn around times engaging the correct set of experts to provide the advice required
The main touted benefit of borrowing to buy property in an SMSF is the potential for tax benefits. Rental income generated from the property is taxed at the concessional superannuation rate of 15%, and if held until retirement, can be tax-free. Additionally, capital gains made upon selling the property after retirement phase can also be tax-free.
Furthermore, it goes without saying that property has historically shown strong potential for capital growth over the long term. By leveraging borrowed funds to purchase assets within an SMSF, investors can amplify their returns, as any capital growth on the property is magnified by the leverage. This means a larger superannuation balance than can be made possible through contributions alone.
It is important to note that borrowing to invest in property within an SMSF also comes with risks, including potential liquidity issues, borrowing costs, and regulatory compliance requirements. WLP Finance can provide access to the correct advisors to protect you against these risks.
If you or your clients are looking to purchase a property, consider investment within the SMSF and reach out to us. We have the right experts to complete a transaction for you.
