Superannuation question

[ReaperSS]

For some time i have always wondered that you can play with you super ( modifying your shares etc) but yet you can’t use any of your super for investments like house, land and for me my small business.

Because i was a dumb pingpingpingping i went and got a stupid loan and paying like $1000 a week for my SS which leaves me nothing after i pay bills. Just about payed it off. Been like 4 years now.

I have had no many to start up my Photography business and im in need of around 5-8k to get all i need ( website, lenses etc)
I cant get another loan and cant save until loans payed.

(no i wont deal drugs, them days are behind me haha)

Now the guy at work just said someone he knew said you can unlock some super for investment. This guy did to invest in some car of all things.

Anyone know if its possible to set your self up?

Thanks
Marc

[duste]

BLAAA knows of some good schemes.

[REXXXED]

You can use your superfund to buy houses (investment properties only, cannot rent them off yourself). You can also buy an investment commercial property, and if you own/run a company then yes you are allowed to rent this from yourself).

Never heard of being able to get money out of your super to help start a business or anything though...

If you are interest, feel free to give me a call Marc (Sam - 0400 232 998) and I should be able to help you sort out a small loan and get rid of the car loan at the same time. Interest rate would either be 8.42% or 7.71% depending on how much you borrow.

ps: I am a Mortgage Broker at The Mortgage Gallery Mt Lawley

[-Luke-]

Does the option to withdraw the unpreserved amount still exist? assuming there is on?

[S13]

short answer is no you cant but there is some random rule that yes you can withdrawl your non preserved super that was contibuted before 1 July '99 and then taxed on it so unless you are older anyway this will either be nil or come out with not enough to buy a pack of tim tams anyway

and the guy that 'invested' in a car would either have to have it classified as a collectable and keep it stored at arms length from related parties OR be elegible to draw from his super anyway - meeting XYZ rules or he will be in full breach of super rules n regs

[Damo 69]

pretty sure you can claim hardship and recieve your super................a guy i know did it back in the day to buy some meth


if a crackhead can work it out, i am sure AL can

[[FFOUR]]

$1000 a week on an SS over 4 years - thats one expensive Commodore!!

[ReaperSS]

;1111441']$1000 a week on an SS over 4 years - thats one expensive Commodore!!

Had a big loan before that had 10k left got 20K for the SS total 30ish.

Have 5k left and 6 months. Just about there :)

[Macca]

Had a big loan before that had 10k left got 20K for the SS total 30ish.

Have 5k left and 6 months. Just about there :)

My maths must be shit but that equates to $201 per week (or there abouts) not 1k

[racegtst]

pretty sure you can claim hardship and recieve your super................a guy i know did it back in the day to buy some meth


if a crackhead can work it out, i am sure AL can


It is extremely hard to qualify for hardship these days and if you do you will end up paying 48.5% tax on a maximum of $10,000.00 hardship payment. The ATO win by a long shot. to prove hardship in short you need to be on Centrelink benefits for 26 weeks and prove that you are going to be evicted or your home loan foreclosed on before you can claim $10k. Then the tax kicks in.

As a Financial Planner I get asked this question all the time and unfortunelty I have to disappoint many a person.

In relation to buying properties in the superannuation environment, this is very possible and I have assisted approx. 10 families achieve this objective in the last few months. Again with property, art and collectibles there is very strict rules with the penalties not worth the risk of taking short cuts or to try and rort the system. The ATO supervise SMSF's and they operate at a different level of law than everything else. When it comes to the ATO your are guilty until proven innocent. i have seen first hand the result of project Wickenby on an decent honest guy who had the wrong advice years ago.

[Turboesky]

Is it possible to pour your super into an existing investment property or only when setting up the loan initially?

[racegtst]

Is it possible to pour your super into an existing investment property or only when setting up the loan initially?

As a general rule if you already own the property then it is a no go unless it is a commercial property.

You can purchase a property using your super and using a Limited Recourse Borrowing Arrangement (LRBA).

Most clients are disappointed when they go to a property spruiking seminar and told how they can set up a SMSF with as little as $40k to $120k and borrow to the hilt to buy property in their super for $500k supercharging their retirement. To use a LRBA can cost up $10k in bank, legal, advice, accounting fees just to set one up from scratch.

It is not suitable for everyone but if people are interested in this sort of thing I always suggest that to explore your opportunities even if yo can't do it now, knowledge and a direction is better than sitting around with a thumb up your bum.

[MRO]

To do any investing with your super money you need a to set up a self managed super fund (SMSF). If you havent got over $200k in super it generally isnt worth it. Accounting, tax and audit fees will cost you at least $3000 each year, paid from your super fund. So for most people on here it this discussion is pointless.

To summarise, there is no chance you can get a few $k from you super fund to set up a business. Just wait the 6 months or see one of the friendly finance brokers above.

[racegtst]

To do any investing with your super money you need a to set up a self managed super fund (SMSF). If you havent got over $200k in super it generally isnt worth it. Accounting, tax and audit fees will cost you at least $3000 each year, paid from your super fund. So for most people on here it this discussion is pointless.



The correct statement there is Property Investing, otherwise there is plenty of options to be able to control the investments in your super without the cost and complexity of using a SMSF. You can use shares, ETF's, managed funds and unlisted property trusts all inside super. Industry funds with a handful of investment options is not your only option with super.

Everyone is different so I always suggest to get professional advice.

Self promotion: I am a Financial Planner, I have my own Australian Financial Services License (AFSL) and I am not controlled or directed by any super fund, investment or insurance company.

[thommo]

How much would you generally be looking at to start a smsf for purchasing an investment property? lets pretend the property value is $500k

[huggy_b]

How much would you generally be looking at to start a smsf for purchasing an investment property? lets pretend the property value is $500k

You can only borrow 65% of the value.

You'll need at least $250k for deposit, set it up, pay stamp duty, legal fees etc. Talk to your accountant, they should give you all the ins and outs.

[thommo]

Fook

[mARC]

You can only borrow 65% of the value.

You'll need at least $250k for deposit, set it up, pay stamp duty, legal fees etc. Talk to your accountant, they should give you all the ins and outs.

It would be fare to state that borrowing within a SMSF environment is more expensive due to the way the structure needs to be set up, also factor in the property value.


To get access to a wider array of investments within your super fund you need a to set up a self managed super fund (SMSF).

Fixed.

[racegtst]

You can only borrow 65% of the value.

You'll need at least $250k for deposit, set it up, pay stamp duty, legal fees etc. Talk to your accountant, they should give you all the ins and outs.

Some banks are apparently lending up to 80% (commercial property is a max of 65%) but I would be concerned with the SMSF being able to afford to pay it's ongoing expenses. Negative gearing in a SMSF is not the smartest thing to do either.

I generally tell clients that they will need to allow approx. $10K for documents, legals, bank fees and advice to set up a new fresh SMSF. Then you have higher insurance costs as life cover etc is now at retail premiums. Stamp duty and other settlement costs are on top of this, then you need to allow for landlords and building insurance as per normal.

[mARC]

I generally tell clients that they will need to allow approx. $10K for documents, legals, bank fees and advice to set up a new fresh SMSF.

This is for bare trust, SMSF, and Corp Trustee?

[racegtst]

This is for bare trust, SMSF, and Corp Trustee?

I did say documents for a fresh SMSF which would include SMSF deed, Corporate trustee, custody or bare trust, extra legals the banks charge, advice for sign off on the advice certificates that nearly all the banks require, time to stamp the custody or bare trust post the settlement ( extremely important to avoid double stamp duty down the track).

I use this as a guide to ensure that all possible out of pocket hidden fees, expenses and charges across the board of all service providers etc are front of mind for a client prior to them committing to what essentially amounts to a very important decision on whether to proceed or not.

Most people only focus on the initial set up fee and not all the costs associated with a complex and long term strategy.

I have seen groups market to people to set up a SMSF to purchase property with less than $80k in super which is disgraceful.

Maybe we should catch up for a chat on how to mutually help client outcomes in our respective fields?

[mARC]

Maybe we should catch up for a chat on how to mutually help client outcomes in our respective fields?

That would be a fantastic idea if I was positioned correctly and its appalling to see how some firms capitalise on the SMSF market.

In a previous firm I saw the director advise a client to create a new SMSF solely to purchase a property for their son to rent out, another to invest in their brothers property development Co. 'in breach of 5%', they were purely after the set up money 'his basic philosophy was start up cash was irrelevant as small funds eventually turn into big funds........'

For what it's worth you're priced quite well in relation to market.

[huggy_b]

Some banks are apparently lending up to 80% (commercial property is a max of 65%) but I would be concerned with the SMSF being able to afford to pay it's ongoing expenses. Negative gearing in a SMSF is not the smartest thing to do either.



Ah OK, I know commercial I could do 80% but they recently tightened that up to 65% max - I thought it was across the board.

[180SXTCY]

really good information in this thread. I wish you were allowed to use your super for a first home buyer's deposit / top up. I reckon it would help a lot of people get into the market.

[sensei_]

really good information in this thread. I wish you were allowed to use your super for a first home buyer's deposit / top up. I reckon it would help a lot of people get into the market.

in some countries, super can be used to purchase properties as if the money was cash at hand, only "catch" is that once the property was sold, the money borrowed + interest had to be paid back, in effect a double win. you use your own money to purchase property, once you sold it, instead of paying the interest to a bank, you pay it into your own super.

[180SXTCY]

why isn't Australia getting on board with this idea? I've just bought my first house and I know how hard it is to save for a decent deposit so it makes sense.