Scarred by losses in the share market and nervous about the global economy, more people are turning to the security of bricks and mortar and investing in property through their self-managed super funds.

Direct investment in property has traditionally been restricted to those with huge amounts of money in their superannuation fund or those borrowing to invest outside of super.

Now, self managed super funds are able to borrow to invest in property, which means someone or a couple with around $150,000 in super, could effectively purchase an investment property for their self managed super fund.

How does it work? The investment property may be purchased using a deposit from the super fund, with rent and super contributions covering the repayments. As well as having tax benefits it means the investment does not affect your current lifestyle or your borrowing capacity, because the deposit and repayments are covered by the self managed super fund.

Buying property inside super is proving a big drawcard, mainly because of the potential tax benefits. For example, somebody in their 50s who buys an investment property outside super, then sells it 15 years later to fund their retirement, then has to pay capital gains tax which could amount to many thousands of dollars.

If the same property is held within a super fund, no tax is payable if the property is sold after the super switches to pension phase.

We can quickly assess for you if a self managed super fund with property might be feasible for you. You’ll need to seek independent advice on setting up a self-managed super fund.

For more information on just how easy it is to include property in your superannuation portfolio contact us today.