Investment - SMSF

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Are there any benefits to investing in a holiday property through a ‘Self Managed Superannuation Fun

There are a number of advantages to investing in property through your SMSF, however, there are restrictions in place and due diligence must be taken to ensure your fund does not breach the Superannuation Investment Scheme Act.  
  • Your SMSF can invest in both residential and commercial property
  • The maximum rate of tax your SMSF will pay on rental income is 15% (as at June 2013)
  • Once your SMSF is in the pension phase, the taxation rate on income drops to 0% (as at June 2013) whereas personally held property rental income is taxed at the marginal rate which is currently as high as 46.5%
  • If your SMSF holds a property for more than 12 months, any capital gain made on the sale of the property will be taxed at a maximum of 10% or again at 0% if the SMSF is in the pension phase (as at June 2013)
  • Your SMSF can borrow limited funds for repairs and maintenance however it is not permitted to borrow funds to improve the existing asset
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