Dreaming of homeownership and wondering if your superannuation can help you achieve it in New South Wales? While superannuation is primarily designed for retirement, there are avenues that may allow you to leverage your super funds for housing-related purposes. In this article, we look at possibilities specific to New South Wales.
First Home Super Saver Scheme (FHSS):
If you’re a first-time homebuyer in NSW, the First Home Super Saver Scheme (FHSS) might be a game-changer. This scheme enables eligible individuals to make voluntary contributions to their super accounts, earmarked for their first home. The contributions, along with associated earnings, can later be withdrawn to assist in buying a home.
To participate in FHSS, the most you can access is $15,000 of your personal contributions from any single financial year, with a cumulative cap of $50,000 across all financial years. This means a couple can access up to $100,000 (if they have contributed enough). This unique opportunity provides a structured approach for aspiring homeowners, allowing them to accumulate funds within their super for a property purchase, thereby supporting their homeownership dreams.
It’s important to note contributions under the employer super guarantee cannot be used as part of the FHSS. Unless you’ve made contributions to super, you can’t withdraw under the FHSS for your deposit.
Making voluntary contributions to your super fund is an option for saving for your first home deposit. Whether through salary sacrifice or after-tax contributions (non-concessional contributions). Salary sacrifice allows you to direct pre-tax money to your super, potentially saving for your house deposit while reducing taxable income. Consulting a financial planner is crucial to navigating these choices wisely and ensuring that your strategy aligns with your overall financial plan.
Self-Managed Super Fund (SMSF): Investing in Property
For those eyeing property investment in NSW, a Self-Managed Super Fund (SMSF) offers a unique avenue and the only way to buy property through a super fund. Unlike standard, APRA-regulated funds, an SMSF allows the purchase of residential or commercial property. However, strict conditions apply, and any property acquisition involves a limited recourse borrowing arrangement (LRBA). This arrangement allows your SMSF to secure a loan for property investment while protecting other fund assets.
While an SMSF can be a platform for property investment, it’s essential to understand that residential properties purchased through SMSF are strictly for investment purposes. The sole purpose test restricts SMSF members from residing in the property themselves, emphasising the fund’s commitment to long-term investment goals.
SMSF Loan Experts: Your Partner in NSW Property Investment
Navigating the intricacies of SMSF loans, especially for property investment, demands expertise. At SMSF Loan Experts, we specialise in helping SMSF owners, members, and trustees secure the right SMSF property loans tailored to their investment goals. Whether in New South Wales or any other location, our team assists in setting up the right structures for SMSF property portfolios. Our objective is to empower you to make informed decisions, ensuring a successful SMSF property investment journey.
Contact SMSF Loan Experts today to explore how we can assist your fund in acquiring property in NSW. Our team is ready to guide you through the complexities and help you make informed decisions for a successful SMSF property investment journey.