More and more investors, and particularly
Baby Boomers are using their Self-Managed Super Fund (SMSF) as a vehicle to
buy an investment property.
So, I’d like to share some of the most
common mistakes people are making so you can avoid them.
people use external funds to assist them in purchasing property in their SMSF
by contributing the cash as a non-concessional contribution.
The problem is that
once contributed you cannot get the funds back until retirement or worse still
you cannot put in sufficient funds within the allowable limits.
You can, however,
lend the funds to your superannuation which allows its release if refinanced
and there is no limit on the amount of the loan.
The mistake that
many people make is to lend the funds with a simple loan agreement.
The loan agreement
must meet the limited recourse borrowing requirements of the legislation as
well as clearly identifying all terms and conditions.
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Wednesday, 28 April 2021