Buying Property In Super

The types of properties that can be purchased are subject to restrictions and rules such as a restriction on acquisitions from related parties and in-house asset restrictions.  There is also a restriction on related parties occupying properties owned by a Super Fund that need to be considered.  However if you do purchase a property in your Fund you can potentially transfer the property to yourself as a distribution once you transition into retirement and enter the pension phase of the Fund.

There are very specific requirements and conditions that must be met if a Superannuation Fund wishes to borrow to purchase property.  A failure to satisfy these requirements can have severe consequences for the Fund both in the compliance of the fund and in relation to stamp duty and capital gains tax for the purchase of real estate.

Ownership of property by a Self Managed Superannuation Fund can provide significant advantages such as the income from the property and any capital gain from the sale of the property being subject to a reduced rate of tax or ultimately to be tax free.