Use Your Super to Buy a Home
If you’re thinking it would be great to use your super to help put a roof over your head, there are only two ways to do this:
1. The First Home Super Saver Scheme (this is very limited but it’s better than nothing – simply Google it).
2. Contrary to mainstream thinking, written ATO private advice to our firm confirms that you may choose to use a SMSF to purchase a home in which to live and work providing certain criteria are met as it all hinges on the concept of Business Real Property.
For those in the know, please be advised this is regardless of whether or not a primary production business is central to the arrangement.
Depending on your situation, this may suit you as follows:
- You’re recovering from a financial calamity such as business failure or divorce and your super is your only significant deposit available.
- You’re a first home buyer and your super is your only significant deposit available.
- You wish to combine your super with other family members to assist you and or they to begin with home ownership.
- You wish to use the cash in your super to upgrade your home to something and somewhere you consider superior.
- You wish to use the cash in your super plus borrow even more (within super), to upgrade your home to something and somewhere you consider superior.
- And more!
To do this, you’ll need a self managed super fund (SMSF) so the thing is to tick enough boxes not to get off-side with the ATO and get your fund’s butt kicked (sorry; we meant deemed “non-compliant”)!
Done right, here’s what you can expect:
- Your fund gets a full tax deduction for property expenses incurred such as mortgage interest and repairs etc.
- On an arms-length basis, your business will rent the property from your fund (surely you see that’s good as the rent goes towards the mortgage which means you’re paying off your retirement asset and if there’s any left, it’s available for investing for your retirement).
- At least half the rent will be a tax deductible business expense (remember you’d be working at your rented home business property) and that’s either full-time or on the side of whatever else you do for a living!
Yes it can get tricky but it’s very “doable” when you know how to navigate the pitfalls and how to maximise your entitlements and where no-one knows this space better than Intellisolve.
Please call for a chat and let’s see if you might initially qualify as once we’ve shown you the big picture and you like it, we’ll then refer you to a switched-on financial planner for a Statement of Advice thus allowing you to proceed with the relevant consumer protections in place.
It’s quite possible that you may never look back!