SMSFs should look to industrial property

SMSFs/self-managed-super-funds/industrial-property/housing-market/negative-gearing/capital-gains-tax/CBRE/

22 March 2019
| By Hannah Wootton |
image
image
expand image

As banks cease self-managed superannuation fund (SMSF) loans for residential property, alongside a downturn in the housing market and potential changes to negative gearing and the capital gains tax on the horizon, trustees may benefit from looking to its industrial counterparts.

At the end of last financial year, property investment loans held by SMSFs were worth $39 billion, or five per cent of all assets in the SMSF sector, so finding an alternative to residential property would be helpful.

CBRE director, Shaun Timbrell, said that commercial benefits also benefited SMSF trustees who were business owners.

“A major benefit is that rent paid through a SMSF can be claimed as a tax deduction as it constitutes as a company expense. Many investors prefer paying rent to their super fund, rather than someone else,” he said.

“The majority of commercial properties purchased through a SMSF are then leased back to a business operated by a SMSF member. SMSF funds can invest 100 per cent of its money in commercial real estate if a member of the fund runs a business. A SMSF can also borrow to purchase a commercial property.”

Rent on commercial properties was also strong. According to CBRE, rental yields of industrial properties averaged 4.5 – 5.5 per cent as compared to three to four per cent for residential.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

1 month 3 weeks ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

2 months ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

4 months ago

Entireti has unveiled the new name for the AMP financial advice businesses that it acquired last year....

4 weeks ago

A Sydney financial adviser has been permanently banned from providing any financial services, with the regulator deriding his “lack of integrity, trustworthiness and prof...

2 weeks 6 days ago

Minister for Financial Services, Stephen Jones, has provided further information about the second tranche of the Delivering Better Financial Outcomes (DBFO) reforms....

1 week 5 days ago

TOP PERFORMING FUNDS