Growth In Self-Managed Super Funds

Driven by the prospect of greater investment freedom, Australian workers have migrated toward self management of their superannuation funds.

More than half a million self-managed super funds (SMSF) are now in operation, according to statistics released by the Australian Taxation Office in May 2013. The exact number of SMSFs (as at March 2013) is 503,320, and approximately 10,000 new SMSFs are being established every quarter. Growth in SMSF membership has trended above Australian population growth. Specifically, in the 5 years to March 2013, SMSF membership has grown at an annual rate of 6.1 per cent. Over the same period, the Australian population has grown at an annual rate of approximately 1.8 per cent.

Assets held in SMSFs reached $496.2 billion in May 2013, representing almost one-third of the $1.58 trillion invested via Australian superannuation funds. A decade ago, SMSF assets represented one-tenth of the aggregate value of superannuation assets.

Superannuation legislation changes in September 2007 made it possible for SMSF fund directors to borrow for investment purposes, paving the way for SMSFs to become a vehicle by which one could invest in property. The key benefit of within SMSF property investment is that members pay zero capital gains tax on property sold in the pension phase of the fund (the pension phase is the period in which a super fund pays an income stream or pension). Capital gains on regular investment property are taxed according to two alternative rules, both of which typically deplete gains by between 15 and 20 per cent.

One in six of Blue Wealth’s clients invest in property through a self-managed super fund. Backed by solid research, Blue Wealth’s complete property solutions have helped hundreds of clients fulfil their property investment goals. To learn more about how Blue Wealth can help your clients reach their investment goals, please contact Julie Gray at julie@bluewealth.com.au.


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