I've read a few post about SMSF and have been trying to get mine and my partners SM for a while, basically when the crash happen my partners was in high risk and he lost over 20k in the first year, due to the report only being sent out yearly we didnt know he was in High risk and losing money, it is now switched to low risk but in recent years we have started buying up houses and are wanting to have a few nice IP under our belt by retirement (currently we are in our early 20's) all our investments have been positive gearing even our family home will be if we rent it out (ha like that will happen
)anyway i've recently gone to a few banks inquiring about using the super to invest but they keep saying the minimum we need is 80K other wise we cant borrow on it even though we still have a good 40 – 50 years of work left in us
and the house prices we look at are around the 150K mark currently we have between us about 20-30K in super, does anyone know a way around this 80K limit?i've been told by a friend (who probably isnt the most reliable source) that we can have 4 people in a SMSF and if each have 20K than the banks should lend us the money for an investment
im also wanting to know are you taxed heavily if you keep the SMSF IP as a rental even when you retire, for example say you buy a block of 8 units and they bring in total 1400 a week would you be taxed high on this?
Tax in the smsf is limited to 15% or zero once you reach conditions for retirement (so there goes CGT once you retire). Remember that you cannot live in any of the properties you buy (like it sounds like you want to).
You can still contribute up to $25k each annually to the fund (so within a year you can have all your existing balances from your other funds plus up to another $100k).
Small funds are unviable so the more money you have to kick it off the better.
Oh we don't want to live in any of the smsf ips we currently have our family home and a few ip we are paying off with our wages/rental return.
the issue is we are sick of losing our Super because we can't invest it exactly how we want, plus we pay a fee to loss it not to meantion the money is sitting there and we are aiming one way or another to have a few ip under our belt for retirement why not use it if we can
but every one of the big banks I've spoken too have said no go without having 80k when I asked about multiple members one of them said "quote" I'm not sure how it works with multiple members ….. Will be back at work next week I can book you in to talk to them if you want" that was westpac and the lady I was speaking too claimed when we first started talking she was the one who dealt with SMSF, the other banks didn't seem to have much input after they found out we only have 20-30k they meantioned about adding more to it but why would I want to do that with such a high risk of losing it while its currently managed by someone else??
Why are you going to a bank for advice re setting up SMSFs? They wouldn't know much about this area.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hi,
we are just going through the process of setting up a SMSF. I was interested for the same reasons as you – I am learning all this stuff about investing and therefore frustrated that I can't invest my own money the way I want to.
One thing to keep in mind is that you can get a bit more creative with your super money rather than just buying a house with it. You can use it as source of credit (obviously you have to be disciplined with this and everything has to be documented). But you can borrow money from your super fund for deposits for other investments that you own and then you pay it the interest you would normally pay another finance institution like a bank.
So I am about to redevelop a property I own. The bank will loan me some of the money, but there will be a short fall so I will borrow money from the SMSF (documented in the SMSF plan, and interest will be paid monthly).
I am also looking at doing some reno's on some properties -the SMSF will help finance that.
That way you are paying your 'interest' to the SMSF rather than a bank – the more money your fund makes, the more you have to access as finance.
I am also putting a large chunk into the US passive fund!!
cheers,
Jessie
weathjess wrote:So I am about to redevelop a property I own. The bank will loan me some of the money, but there will be a short fall so I will borrow money from the SMSF (documented in the SMSF plan, and interest will be paid monthly).
How do you overcome the law that SMSF are prohibited to lend to members or associates of members, s 65 SIS Act
http://www.austlii.edu.au/au/legis/cth/consol_act/sia1993473/s65.html
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hey Terryw, to be honest i have no idea who i should talk to about this, the banks seem to advertise the SMSF a lot so i assumed they might know what it involves…. seems not many of them do… we are thinking of talking with an accountant now as they might have more advice than the banks.
do you Self manage your super and if so who did you talk with?
hey Weathjess, just wondering if you spoke with a particular group or person about your SMSF? if so do you mind if i know who?and forgive me but what is a US passive fund?
Terry i was thinking the same thing.
Borrowing money from your own SMSF to undertake a small development in your own name now that sounds like something you average Bank would advise you to do.
Sect 65 (1) (b) will crusify you if you do this.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Wonder where Jessie got that advice?
That was the second post in one day saying the same thing.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
)
and the house prices we look at are around the 150K mark currently we have between us about 20-30K in super, does anyone know a way around this 80K limit?
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