smsf property investment

Purchasing an NDIS investment property using an SMSF can be a great alternative to traditional property or stocks and bonds.

In the past, the difficulty has been navigating the requirement that a property purchase via an SMSF must adhere to a single contract. In contrast, an NDIS purchase has two contracts – one for the land and another for the construction of the property.

So how is it possible? By engaging a charity-based organisation that funds the purchase of land and construction. The final purchase for the SMSF includes the cost to fund the project construction with an additional establishment fee paid to the charity.

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NDIS Smart & Simple Investment Guide

Our 11 page guide covers the eight must do steps to succeed in your NDIS property investment journey.

“It is said that cash flow allows you to stay the journey, and capital growth is the reward for finishing the journey.”

the process

  • An introduction to a Finance Broker experienced with both NDIS and SMSF funding
  • The broker provides documentation outlining the finance and investment details
  • Finance pre-approval is arranged and finalised (maximum 80% LVR)
  • Upon gaining pre-approval suitable NDIS investment property options are presented for consideration
  • An introduction and discussion with an SDA prior to committing to the purchase
  • Once an NDIS investment property option is selected the builder and charity organisation are notified
  • The charity organisation purchases the land and funds the cost of the construction to completion
  • Upon completion the property is sold to the SMSF as a single contract

a real world example

The following genuine client purchase is provided as an example of what an SMSF property investment utilising the NDIS could look like. To discuss this exciting opportunity in further detail please reach out to our ever friendly investment team.

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ComponentCost
Land purchase price$253,000
Fixed price build contract$569,000
Total - House and Land Package$822,000
Estimated interest during construction$31,302
Establishment fee$24,530
Total - Additional Costs to Complete Construction$55,832
Total - House and Land Package$822,000
Total - Additional Costs to Complete Construction$55,832
Total - Cost to SMSF for Construction$877,832
(Deposit Paid to Charity Organisation)
SMSF proposed loan LVR 80%$164,400
Total - Additional Costs to Complete Construction$55,832
Total - Deposit Paid to Charity Organisation$220,232
(SMSF Total Funds Required)
SMSF proposed loan at 80% LVR$164,400
Total - Additional Costs to Complete Construction$55,832
Stamp duty on established purchase$30,015
SMSF loan fees$7,000
Total - SMSF Funds Required to Complete Established Property$257,247
(Loan Required)
Total - House and Land Package$822,000
Deposit - 20% of total House and Land package$164,400
Remaining loan amount on House and Land package$657,600