
Author Name: Olvia Anderson
A fund established by one to four people with the sole objective of offering retirement benefits is a self-managed super fund.
While SMSF members receive the same tax breaks and benefits as retail, corporate, or industry super funds, the main distinction and draw for many is the option for members to take direct control of the invested assets as SMSF property.
What is an SMSF property?
SMSF, or a self-managed superannuation fund, is a way to invest in property through your superannuation fund. It can be a great way to grow your retirement savings, as you can use the property to produce income and capital gains.
This is considered a good option for the members, though they have to provide them to others, it includes gains for them. Therefore, it is a good one to be chosen by them.
What are the main features of SMSF?
The various features of the SMSF are as follows:
- Not more than 6 members
- All members are trustees
- All trustees are members, except the single member
- If the trustee is a company, members are the directors
- No member is allowed to be an employee of another unless related
What is the purpose of SMSF?
The primary purpose of the SMSF is to provide for its members in retirement. It works for the benefit of the members who are the trustees of the company or firm. And the motive is to provide for members who are retired.
What are the advantages of an SMSF property?
There are different advantages of holding an SMSF property inside an SMSF rather than getting your name. Its advantages include:
- Concessional tax on rental income
- Concessional tax on future capital gains
- Increased superannuation opportunities
- Other benefits include additional protection etc.
Rules to comply with SMSF property:
Buying the SMSF property includes some rules and regulations needed to comply with for getting an SMSF property. An SMSF property can only be bought by one of the following rules:
- Meet the sole purpose test, which states that they must only serve to provide retirement benefits to fund members
- They have not been purchased from a member’s related party
- not occupied by any fund member or related party
- And not been rented by any fund member or related party.
What are all charges to be paid for SMSF property?
The buying of SMSF property includes many charges to be paid. These taxes and charges as a whole could cost a lot. Various charges that are levied in buying the SMSF property are as follows:
- upfront fees
- legal fees
- advice fees
- stamp duty
- ongoing property management fees
- bank fees
Also, the unusual charges need not be paid to be safe from scammers. And it’s important to know that anyone from whom the advice is taken must have an AFS license.
Is SMSF property worth it?
It could be said that getting an SMSF property is worth it. Though the member owner does not have the right or is not permitted to use the property, the one who owns it has a sort of benefit included with it in different ways. The rental income is paid to SMSF for the use of the property.
SMSFs might be the way to go! Properties held in an SMSF can offer significant tax advantages, and it might be excellent with the property market on the rise.
To conclude, it could be said that the SMSF properties are an excellent option to be taken up by the trustees and employees. These would give them a sort of advantage, as mentioned above.