Changes to the super system announced by the government of Australia in the May 2016 budget has significantly widened the availability of property investment through a self-managed super fund (SMSF).

1. Benefits & Limitations of SMSF Property
Investment Finance in Australia
Changes to the super system announced by the government of Australia in the
May 2016 budget has significantly widened the availability of property investment
through a self-managed super fund (SMSF). It is important to understand this type
of property investment is not meant for every builders, landlord or property
investors. This post discusses some of the benefits and limitations associated with
availing self-managed super funds.
Benefits of SMSF property investment
Benefit number 1# Tax effective
SMSF receives concessional tax treatment, as the preferred investment options
for retirement savings. It is important to understand that the earning of SMSF is
taxed at only 15%. This means that the taxation amount is less than half the
marginal tax rate that is usually paid by the majority of workers in Australia. Also,
it is important to understand that the earnings within the pension phase are free
from any taxes.
Benefit number 2# Provides investors with purchasing power
The saving of the investors outside the SMSF environment may not be sufficient
for investment in direct properties. Combining the capital within the other
members of the SMSF though may give the investor the purchasing power that
they need to invest.
Benefit number 3# Provides investors with control over their investment
It is important to understand that many property investors in Australia enjoy
having total control over the property investment they purchase. In addition to
this, they also relish their ability to add value to their property investments
through development work or renovation.

2. Benefit number 4# Business benefits
You can purchase a commercial property for leasing back to their business,
provided they pay a commercial rate of rent, while property investment cannot
purchase a residential property to rent back to them.
Drawbacks to SMSF property investment
Drawback number 1: Lacks diversification
Diversification is more difficult to achieve in property investment in Australia if
the SMSF of the investor owns just one or more large assets. It is very crucial to
understand that in SMSF property investment loan, the lack of diversification
may not be in the best of interests of the SMSF members in Australia.
Drawback number 2# Investors cannot benefit personally from the property
It is important to understand that the property investment within an SMSF must
be purchased via an “arm’s length’ transactions. In addition to this, it must be
precisely maintained on a strictly commercial basis. As such the investor cannot
rent, purchase4 or sell the property to any related party in Australia.
Final thought
Investors in Australia should be aware of many small details when they want to
invest with an SMSF. So it is important for any investor to do their market
research and ensure that they get professional aid, assistance, guidance and
advice from Australian property investment experts where necessary.
To know more about SMSF property
investment loan, Visit: Globalcapital.com.au