Investing in your future…Leveraging NRAS in your Self Managed Super Fund

If you want to maximise your retirement savings property investment through a Self Managed Super Fund (SMSF) is the most tax effective way to go. And of course if you add the NRAS incentives the story gets even better.

At NRAS 4 SA, as a specialist in this field, we have experience and expertise to in making this happen with minimum fuss. While many will tell you it can’t be done, we have plenty of experience that proves that notion to be incorrect.

Depending on your circumstances it could well be more tax effective to buy a property through SMSF, rather than one outside of your SMSF.

It can be more tax effective to buy a property through an SMSF because rental income is taxed at the superannuation tax rate of 15%. And once you retire, the SMSF can pay you a pension which could potentially be tax free.

There is even more to be gained when you decide to sell the property because capital gains are effectively taxed at 10 percent and can be tax free if a pension has started.

There is no such thing as a free lunch on the Government though…

So if you think its right for you ……There are rules that govern what you can and can’t do with property in an SMSF. These include:

  • Fund members and relatives can’t live in or rent a residential property held in the fund
  • SMSF trustees must demonstrate that the investment strategy supports their retirement goals
  • Gearing through an SMSF can only be done through a ‘limited recourse borrowing arrangement’ (LRBA), which is less flexible than traditional property borrowing arrangements

Also in general it’s not possible to replace or redevelop a property that’s subject to an LRBA if the work done changes the character of the property .

You Need the Right Advice

Given property investment rules differ within a superannuation environment it is vital that you get the right advice to ensure decisions you make comply with the rules and are in sync with your investment strategy.

At NRAS 4 SA we work with accountants and financial planners who have firsthand experience at dealing with property in SMSF and more importantly at combining NRAS with SMSF.

Recently in their Business View Magazine the NAB published a few do’s and dont’s to consider:

  • Do ensure your SMSF is set up correctly
  • Do make sure it fits with your overall investment strategy
  • Do get advice about gearing before committing yourself
  • Do consider holding your business’s commercial property in an SMSF
  • Don’t be concerned if you have no experience – draw on professional expertise
  • Don’t ignore compliance and administration obligations
  • Don’t let your trust deed go out of date
  • Don’t wait – start now



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