Adding Value to Your SMSF with Business Premises

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So you want to invest in SMSF property? That’s a smart move, as SMSFs can now buy investment properties outside of super funds. And if you’re going to do it right, you need to ensure SMSF property investment is rented out properly.

Owning business premises in an SMSF can make a lot of sense for both SMSFs and business owners. Rather than having a third-party landlord, it can provide a consistent source of income and capital growth for the SMSF while also providing stability for the business owner.

An SMSF offers the same concessions and tax benefits as retail, industry, and corporate funds. One significant distinction is the ability to own direct property and has complete control over an investment strategy.

Purchasing a property through an SMSF can be an excellent investment strategy for generating long-term retirement wealth. But it is not a one-size-fits-all solution for every investor.

Simultaneously, putting your business premises in an SMSF, rather than holding them personally or in a company, can cause significant tax savings upon disposal.

Finally,SMSF property investments provide one of the most robust structures for protecting assets from creditors in the event of bankruptcy.

Why SMSF Property Investment?

SMSFs for property offer several benefits to investors, including:

  • You can invest tax-free from much larger amounts than an unlisted managed fund or an individual share. This makes it easier to build your portfolio quickly if you have the money.
  • SMSF property investments are not limited to shares and term deposits, but may also include direct property investment.
  • SMSF property investments can also be used as security for a loan, including a self-secure loan with the SMSF’s bank account. This way, you can invest more money in your SMSF by using other people’s money through SMSF loans secured against SMSF property.

SMSFs are also excellent tax structures to use when investing in SMSF property. Because SMSFs are treated as separate tax entity for income tax purposes. Income and capital gains that are made on SMSF property investments are kept within this separate tax structure.

And remember, your SMSF is not limited to investing in just one type of asset class. But can hold several types of assets under one fund name. SMSFs are therefore very flexible in SMSF property investments.

SMSF properties provide tax-effective capital growth, excellent opportunities for ‘recycling’ as SMSFs can buy and sell a property without investors paying capital gains tax. SMSF properties also provide SMSF trustees with an excellent opportunity to diversify their investments.

There are several options for SMSF property:

You can invest in new or established residential and commercial property through SMSF loans with a related party and even purchase your own SMSF property.

So what SMSF property can you invest in? Today, SMSFs may invest in residential or commercial SMSF properties, SMSF units in a unit trust, or SMSF shares in an investment company. SMSFs can even purchase their own SMSF property!

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