Q: I’m an expat Australian, and I have been living in Europe for quite a few years. I am 57 and I want to access my superannuation to buy a property. Is that possible? I have no idea if I will retire back in Australia or stay here, but my view is that if I do retire back in Australia, I will sell the property to fund my retirement.
A: I have divided your question into 2 questions:
- Can I access my super at 57, if I am living overseas
- Can I access my super to buy a property?
1. Can I access my super at 57, if I am living overseas?
The rules relating to when you can access your super benefits are fairly strict. You must satisfy a condition of release, and the most popular conditions of release are:
- Retirement after reaching preservation age (age 55 years for those born before July 1960, and at least 56 year for those born after June 1960), OR
- Turning 65, which is considered a condition of release, and you don’t have to retire from the workforce, OR
- Taking a transition-to-retirement pension (TRIP), which is only available to individuals who have reached their preservation age, OR
- When you suffer ‘severe financial hardship’ (hardship provisions don’t generally apply to individuals living outside Australia).
Specific rules regarding super access come into play when a fund member has reached their preservation age. Preservation age is at least 56 years (for those Australians born after June 1960) depending on birth date, although if a person was born before July 1960, he or she has a preservation age of 55 years. Reaching your preservation age means an individual can access super benefits provided they have also retired from the workforce.
If you were born before 1 July 1960, your preservation age is 55 years, which applies to anyone currently 57 years of age.
For an Australian living overseas, the rules are a little more complicated: you should check the rules with your Australian super fund, and the tax implications with your accountant or the ATO.
Generally, an Australian living overseas, like an Australian at home, who has reached their preservation age, can access his or her super benefits in Australia provided they provide documentary evidence to the fund that they have retired.
If an ex-pat is no longer a resident of Australia however, and reached preservation age, I believe that provided the individual supplies documentation of overseas residency and that they are not employed in Australia, then super funds will consider releasing the super benefits, although super funds will generally still require some form of ‘retirement’ declaration. Again, you need to do your own research on your particular circumstances.
Note: Tax is generally payable on super benefits withdrawn before the age of 60, and Australians living overseas will need to get tax advice on how the super benefits affect other taxable income.
You may find the following SuperGuide articles helpful:
- Accessing super early: 14 legal ways to withdraw your super benefits
- Retiring before the age of 60: the tax deal
- Preservation age. I’m 58. Can I withdraw my super benefits?
- If I retire before 60, when can I access my super?
2. Can I access my super to buy a property?
The answer to whether you can access your super to buy a property is, generally ‘no’, although there is an exception in relation to self-managed super funds, in particular, commercial property.
As I mentioned earlier in my response, the general answer is that you can only access your super if you satisfy a condition of release such as, retiring after your preservation age (55 if born before July 1960, and at least 56 years and up to 60 years, if born after June 1960), turning 65, or suffering severe financial hardship (subject to strict rules).
If you satisfy a condition of release, such as retirement, and you can access your super benefits, then how you spend your super benefits on is up to you.
If you run a self-managed super fund (which is unlikely if you have been living overseas for an extended period), then there may be opportunities to purchase property within your super fund, but generally not for personal use. The only exception to personal use within a self-managed super fund is where the property is a business-related property, such as an office, factory or shop, and then it may be possible to lease the property from your super fund.