Buying a Property with Your Super has become incredibly popular in recent years, especially since it became possible to borrow money through your SMSF to buy direct residential properties. However, while it’s a great alternative to traditional property investing and can be an excellent way to get on the property ladder, there are a number of things that you should consider before making this decision.
When can I withdraw my super?
One of the biggest things to consider is that property purchased by an SMSF cannot be lived in or leased to a member, a related party or their associates. In addition, SMSFs are prohibited from repairing or improving a property that they don’t own outright (i.e., borrowing to purchase an investment property). This is not something that should be taken lightly and can have some serious implications if it’s not followed properly.
Another thing to keep in mind is that purchasing a property in your super is a complex process with strict rules that you must adhere to. This is why it’s always recommended that you seek out qualified and experienced advice before you make any decisions on this topic.
There are a couple of options when it comes to using your superannuation for a property purchase. One option is the government’s First Home Super Saver Scheme, or FHSS, which allows first-home buyers to use voluntary (before-tax) contributions made by themselves or their employer to help with a deposit. However, this is only available to those who meet certain criteria and isn’t suitable for everyone.