SELF MANAGED SUPERANNUATION FUNDS

The National Rental Affordability Scheme (NRAS) is becoming an increasingly popular option for savvy investors in-line with a number of recent legislative changes.

The new laws allow Self Managed Super Funds (SMSFs) to borrow money to purchase residential or commercial real estate.

A SMSF investor can have just as much choice and control over investment properties purchased within a SMSF as they would in their own name, making the NRAS an appealing option.

Leading property analyst Michael Matusik, director of Matusik Property Insights, said there were significant tax benefits to owning property through a SMSF.

“Income and capital gains from a property, as with other fund-held assets, are concessionally taxed,” he said.

“Income is taxed at 15% a year and capital gains are taxed at an effective 10% during a fund’s so-called accumulation or saving phase, if the property is held for more than 12 months.”

Mr Matusik said there were also asset protection advantages of owning property in a SMSF.

“Assets held in a super fund are legally inaccessible to trustees in bankruptcy provided contributions or asset transfers were not made with the ‘main purpose’ of avoiding creditors,” he said.

“That makes superannuation a prized method of asset protection, particularly as there is no dollar limit on the protection.”

Mr Matusik said investing with an NRAS property was also attractive because it offered all the benefits of a normal property purchase, with generous tax free incentives from the Government that totalled $9,524, indexed to CPI, for up to 10 years.