Self Managed Super Fund

Borrowing within a self managed super fund is more complex than standard residential or commercial lending due to the laws involved around Limited Recourse Borrowing Arrangements (LRBA). It is important to seek independent financial and legal advice to make sure you are able to borrow to purchase property. We have extensive experience assisting SMSF trustees obtain funding for property purchases their SMSF.

Who can obtain an SMSF Loan?

Australian residents that have an existing SMSF or are in the process of establishing an SMSF. SMSFs which are purchasing or wish to refinance an existing Residential, Commercial or Rural Residential  investment property as a single asset.

What types of property can an SMSF loan be secured against?

Residential

The SMSF loan is suitable for the purchase of a single residential investment property or to refinance an existing SMSF residential investment property loan.

Commercial

Other types of properties including but not limited to commercial, offices, retail shops and light industrial.

Things you should do before buying an investment property within a SMSF

You need to, seek independent financial and legal advice with respect to the SMSF borrowing money to purchase an investment property.
Establish the trust structures required for the loan, ensuring this complies with the relevant Superannuation Laws. The loan would then need to be taken out by the SMSF Trustee. Set up a separate Property Trust, which will be the legal owner of the property.

To purchase the property, the SMSF can use the cash funds it has available and borrow the remaining amount plus other associated costs. The investment property will be the security for the loan.

The Property Trust becomes the legal owner of the property while the SMSF is the beneficial owner and receives the rental income. When the loan is repaid, the Property Trust will transfer the legal ownership of the property to the SMSF.