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I have a rental property which has been in my superfund since about 1991. This was back in the day when it was legal to loan against a property in the superfund.
I have a trustee company for the superfund which manages this.
The property value is about $550,000. I owe about $60,000 on the property. The value of the property is the lions share of my super. I’m getting about a 5% (rent $490 per week) return on the property and I going to talk to my accountant about transition to retirement so I can access some of the rental return.
We have another property which is not in the superfund, valued at approx $230,000. We owe about $124,000 and receive $280 a week.
Can we some how put the latter property in the superfund to get the tax benefit?
A: As I don’t have access to any fund documents I’ll have to assume that the 1991 loan is, and has always been, an allowed borrowing under Sec 67(5) of the Superannuation Industry (Supervision) Act 1993.
Typically super funds have been prohibited from taking out most loans after early June 1986.
The second property can only be acquired by the super fund if it’s Business Real Property – BRP - (in simple terms, a property used wholly and exclusively in the running of a business) and the debt on it has been repaid.
If it’s BRP, please let us know as there may be a way for your super fund to acquire it and retain some loan on it.
Regards,
Tony Negline.
