Acquiring commercial property can be a terrific long-term investment for medical specialists and Walshs actively encourages our specialist clients to consider ownership of their medical suites or consulting rooms.
Buying medical consulting rooms (or a partial interest in consulting rooms) is a common strategy for many specialists as they build their private practice. Factors such as the medical specialty, location, and the size of the medical group can influence the decision to invest in real estate alongside running a medical services business.
While you may be familiar with the advantages of utilising a Self-Managed Superannuation Fund (SMSF) for real estate purchases, the rules associated with this approach often lead to significant confusion.
Why Choose an SMSF?
When it comes to purchasing consulting rooms, considering a Self-Managed Superannuation Fund (SMSF) can offer significant advantages, If you have a long-term perspective, sufficient funds in your superannuation, and the ability to make contributions, an SMSF can offer significant tax benefits and ownership opportunities.
One major benefit is the potential for substantial tax savings. While you're working, superannuation is generally taxed at 15%. However, in retirement, it can potentially be taxed at 0% based on your age. By acquiring consulting rooms through an SMSF, you can enjoy long-term tax advantages that surpass other ownership options.
Another advantage is the SMSF's ability to directly purchase property. While most superannuation structures prohibit buying or renting property from a related party, such as yourself or a related trust, SMSFs have an exemption for purchasing or leasing "business real property." Fortunately, medical rooms often fall under this category, making an SMSF a suitable ownership option.
With an SMSF, you gain greater control over your investment decisions. As the trustee of the fund, you can actively manage and oversee the property within the SMSF's regulations. This autonomy allows you to align the investment strategy with your specific goals.
Moreover, owning consulting rooms through an SMSF provides long-term financial security and stability. It ensures continuity for your patients and offers potential rental income that can bolster your retirement savings or be reinvested for future growth.
Managing an SMSF, however, requires a thorough understanding of the rules and regulations, as well as dedicating time and effort to ensure compliance. It's crucial to stay updated with legal and regulatory requirements to avoid any potential penalties or pitfalls.
Questions about how we can help you utilise a Self-Managed Superannuation Fund?
If you're considering acquiring medical rooms for long-term capital growth and tax advantages, using an SMSF could be beneficial. However, it's important to evaluate your personal circumstances and seek expert advice on wealth management, tax implications, and legal considerations before proceeding. Consult with a Walshs financial adviser to determine if utilising an SMSF is the appropriate decision for your medical consulting rooms acquisition.
All advice on this site is general in nature and does not take into account your personal circumstances. Please do not hesitate to contact one of our adviser accountants or financial planning advisers if you have a query that is specific to your circumstances.
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