Our Blog


Using your SMSF to invest in property.

What is a Self Managed Super Fund?

A Self Managed Superannuation Fund (SMSF) is a specialised retirement savings vehicle, used to accumulate superannuation money for retirement benefits for members.SMSFs operate in the same way as any other superannuation fund, however the responsibility of managing the fund rests with the trustee. With a SMSF, you can be both a member and a trustee. Therefore, establishing a SMSF can be a major decision for you.

What are the benefits?

There are several benefits that a SMSF enjoys over alternative and more traditional retirement savings options. By opting to use a SMSF for retirement savings, trustees are able to enjoy the following benefits:
  •     Flexibility
  •     Taxation Benefits
  •     Options for Investments
  •     Increased Control for Trustees

Trustees are able to invest in assets of their choice and recover excess franking credits from the Australian Taxation Office each financial year. The ability to control your own superannuation interests is a major factor for individuals looking to establish their own SMSF.
How do SMSF work?

SMSFs are established through the signing of a trust deed, which outlines the rules and regulations of the fund. Funds are governed by the Superannuation Industry (Supervision) Act 1993 and by the various regulations included in this legislation.

Each SMSF can have between one and four members, and is operated by a single trustee or a group of trustees.

Once the deed has been signed, the fund is required to operate as a totally separate entity, hold at least one meeting annually and ensure that the fund is complying for the entire financial year.
What about Taxes?

SMSFs receive the same tax concessions as any other super fund, and any concessional contributions made will be taxed at 15 percent.

Capital gains incurred by the fund also receive tax concessions – where the asset is owned for more than 12 months, a one third discount will be applied to the total capital gain.
What are your options?

There are two options when establishing your SMSF. Will you be the trustee, or will you appoint a company to act as the trustee? This will depend on your individual circumstances, and it is best to seek advice on this matter.It is also important to remember that, as with any type of investment, there are risks associated with buying an investment property through a SMSF. SMSFs will not be suited to all Australians, so it is important to seek independent advice prior to establishing a SMSF.

This article has been provided by Justin Beeton, Founder and Managing Director of The SMSF Club.Justin holds a Bachelor of Commerce Degree, a post graduate diploma in Applied Finance and Investment, is a licensed investment adviser, and a qualified and practicing investment manager.