By Brad Makivoy | May 12, 2017


Ever wanted to own an investment property but just didn’t have the funds available to invest?

Well, a growing number of Australian investors are taking advantage of some little-known changes to superannuation law to purchase investment properties using their super.

While for many Australians, superannuation represents one of their biggest investment assets (that often ignored 9.5% of your salary), most continue to simply entrust it to whichever default super fund provider their employer happened to choose for them.

As Daniel Gerson, Self Managed Super Fund Specialist of Perth-based Quest Advisory Group, explains, since 2007 the landscape has changed.

“Before 2007, superannuation law restricted Australians from borrowing the money in their super to purchase an investment asset, such as property.”

This put property investment out of reach for the average Australian investor.

With changes to superannuation law making it possible to borrow money in their super, “It is now possible for most Australians to use their super to purchase their own investment property. And we’re seeing more people ditch their current super fund provider in favour of making their own decisions with Self Managed Super Funds”.

What are the benefits of using super to invest in property?

The biggest attraction of using super to invest in property is that superannuation can be converted into a tangible asset, something that you can physically go and view, rent out and use to generate income to support you through retirement.

“Australian’s love property investment, there’s no doubt about it. Unfortunately, with property prices rising, it’s become increasingly difficult to break into the investment property market. Utilising super funds, however, can open this up more than people realise.” said Daniel.

Adding to this appeal, using super to invest in property can offer some significant tax benefits as well:

  1. Your super fund will be taxed at 15 per cent – considerably lower than most people’s personal tax rates.
  2. If the property is sold during the accumulation phase, the capital gains tax may be calculated at a discounted rate.
  3. If the asset is sold while the super fund is in pension phase, it can be tax free.

Sounds good! Can Anybody Do This?

In order to access your super funds to invest in property, you will first need to change to a Self-Managed Super Fund.

This does not mean you will need manage it yourself, it will be managed for you as part of your property investment.

Self Managed Super Funds aren’t for everyone, but because of their potential upside, they’re certainly an option worth investigating.

If you’d like to find out if you self-managed super funds are an option for you, you can check your eligibility here.

Find out if you can get started in property investment by using your super. Click on your state to get started!

Find Out if I’m Eligible