USA Property Investment
SMSF USA Property Investment
SMSF USA Property Investment is a growing strategy among Australian trustees looking to diversify their super funds internationally. The U.S. property market offers attractive opportunities, but it’s essential to comply with Australian SMSF laws and structure the investment correctly from the beginning.
Can Your SMSF Invest in U.S. Property?
Yes, your Self-Managed Super Fund is legally allowed to invest in U.S. property, provided the investment meets ATO guidelines, aligns with your fund’s investment strategy, and satisfies the sole purpose test.
To ensure legal ownership and tax compliance, trustees must be aware that direct title ownership may not always be permitted in the U.S. by foreign entities. In such cases, a Bare Trust or Custodian Trust is used to hold the property.
Required Structure for Compliance
For SMSFs, using a Bare Trust helps meet both Australian regulations and foreign legal requirements. This structure keeps the title with the trust while all financial benefits go to the SMSF.
Structure Includes:
SMSF owns 100% of the Bare Trust
Trust holds legal title of the U.S. property
All income and expenses reported under the SMSF
Compliance and Documentation
Before proceeding, ensure the Trust Deed and Investment Strategy allow international property investments. Trustees must:
Keep accurate valuations and records
Prepare for SMSF audits
Report foreign income and capital gains on the SMSF tax return
Currency, Tax, and Risk Considerations
You’ll also face currency exchange risk, and the U.S. IRS may impose withholding taxes on rental income or capital gains. Understanding double taxation and whether credits apply under the Australia-U.S. tax treaty is crucial.
Get SMSF Specialist Support
Engage an SMSF specialist like SMSF Depot to ensure your investment stays compliant while maximising return potential. We help with structure, setup, accounting, and ongoing compliance for overseas property investments.