Hi
We were wondering if anyone has used super to fund overseas property.
I would want to use my super to use as deposit for overseas property…
any tips or guidance will be great.
Using Superannuation to Fund Overseas Property ?
smilearchitect on 02/08/2015 - 10:15
Last edited 02/08/2015 - 14:45 by 1 other user
Last edited 02/08/2015 - 14:45 by 1 other user
Comments
well thats the area i want to retire ultimately….
its my dream ….Tasmania?
why don't you buy the land overseas with cash now and build later? you could even buy several lots if you choose the right country. then sell those lots you don't need or rent them out when you retire to that country.
Fair enough. I reckon you may struggle to get a loan for overseas property within your SMSF.
well have you done it? if you have can you let me know an insider peek?
well for me the loan is approved from overseas bank but the thing is can i transfer the super overseas?
Can you elaborate, where and which bank ?
I have a SMSF but no I haven't done it. You should seek professional legal advice on it though as the penalties can be severe if you get it wrong. The ATO doesn't care for excuses with SMSF as trustees need to be on top of everything.
I would want to use my super to use as deposit for overseas property…
You would need the SMSF to get a loan for the rest. How would you get any lender to do that. OS lenders wouldnt have any way to lend to an Australian SMSF. Hard enough to have them lend to an Australian. let alone a non resident entity. Australian Lenders would like having a mortgage over an OS property.
As you said you want to live in it, but my understanding you cant buy assets for a SMSF that are used by beneficiaries or related people. So it would have to be sold before you could use it. That even covers selling it later to yourself, which you would have to do at market rates, so really only if the property makes money for the SMSF would it be worth doing.
Finally arguing with the ATO that you got advice at Ozbargain won't help if you got it wrong. Only use the info here to help you ask questions of a qualified legal advisor. Also you can ask the ATO as well.
some info here
https://www.amp.com.au/personal/insights/your-questions-answ…
and more here
https://www.moneysmart.gov.au/superannuation-and-retirement/…
There is no reason you can't buy real estate abroad as part of your smsf.
Just remember:
- any finance must be non-recourse, and you need to own it via a bare trust. I would expect this to be almost impossible to achieve, but perhaps you can do it. But not an issue if you have the money for full purchase
- you cannot use the asset, it must be an arm length investment, so no vacations there, for example.
- there are a bunch of hassles with admin and paperwork regarding holding real estate. Understand your tax, reporting and regulatory obligations before you invest. Especially as you will likely have extra obligations as a non-individual owner.
- consider if you could get the same outcome easier. For example, if you wanted to retire in the USA, you could invest in an ASX listed fund that invests in US real estate, then sell that when you retire and use the proceeds to buy property then.
Why overseas?