Your Ultimate Guide with Mantra Mortgage
Are you wondering if you can use your super to buy property in Australia? You’re not alone! The surge in Self-Managed Super Funds (SMSFs) has sparked growing interest in superannuation property investment. Mantra Mortgage, your trusted partner in property financing, brings you this comprehensive guide to help you navigate the world of using super to buy property.
The Rise of SMSFs and Property Investment
In just over a decade, the number of SMSFs in Australia has skyrocketed from 440,000 in 2011 to 606,217 in 2023, with over 1.13 million members. This growth has led to a staggering $166.9 billion invested in property through superannuation funds.
Can You Use Your Super to Buy Property?
The short answer is yes, but there are specific conditions and categories:
3. Retirees or those over 65
Let’s dive into each category and explore how you can leverage your super to buy property.
Using Super to Buy an Investment Property through SMSFs
Step-by-Step Guide:
1. Establish an SMSF: Set up or join an existing SMSF, ensuring compliance with regulations.
2. Understand Contribution Rules: Utilize accumulated personal and employer contributions.
3. Meet the Sole Purpose Test: Ensure the property investment is solely for retirement benefits.
4. Navigate Borrowing Rules: Use a limited recourse borrowing arrangement (LRBA) for property purchase.
5. Know Property Restrictions: Focus on “business real property” like commercial or industrial spaces.
6. Manage Loan Repayments: Use SMSF assets, including rental income, for repayments.
7. Consider Tax Implications: Be aware of capital gains and income tax consequences.
First Home Buyers: The First Home Super Saver Scheme (FHSSS)
Mantra Mortgage explains how first-time buyers can access up to $50,000 of voluntary super contributions through the FHSSS:
• Contribute up to $15,000 annually
• Apply to the ATO when ready to purchase
• Allow time for ATO assessment and fund release
Over 65 or Reached Preservation Age?
Once you hit 65 or reach your preservation age and retire, you gain full access to your super funds. Your preservation age varies based on your birth date, ranging from 55 to 60 years old.
Expert Guidance from Mantra Mortgage
Navigating the complexities of using super to buy property can be challenging. That’s where Mantra Mortgage comes in. Our expert mortgage brokers are ready to provide personalized advice on:
• SMSF property investment strategies
• FHSSS applications and processes
• Retirement property purchases using super
Don’t let the opportunity to leverage your super for property investment pass you by. Contact Mantra Mortgage today for a free consultation and take the first step towards your property investment goals.
Remember, when it comes to using super to buy property, expert guidance is crucial. Trust Mantra Mortgage to help you make informed decisions and maximize your superannuation property investment potential.
