SMSF Loans

A self-managed super fund (SMSF) is a private superannuation fund that may give you increased control over how your retirement savings are managed and invested.It must also have either individual trustees or a corporate trustee who are responsible for managing the fund and making investment decisions on behalf of its members.

Managing an SMSF comes with important legal, tax and compliance obligations. Trustees are responsible for ensuring the fund operates in accordance with superannuation and taxation laws, which is why it is important to seek guidance from appropriately qualified and licensed professionals.

Before purchasing an investment property through an SMSF, the fund must have sufficient money available to cover the deposit, stamp duty, legal expenses, lender fees and other ongoing costs associated with owning the property.

Where an SMSF does not have enough funds to purchase a property outright, an SMSF loan may provide a way to finance the purchase. This can allow eligible funds to invest in residential or commercial property while retaining sufficient cash for other expenses and obligations.

An SMSF loan, commonly structured as a limited recourse borrowing arrangement (LRBA), allows a self-managed super fund to borrow money to purchase an eligible residential or commercial investment property.

When an SMSF purchases a property using borrowed funds, the property is generally held in a separate holding trust until the loan has been fully repaid. The SMSF then makes regular repayments, including interest and applicable fees.

Under an LRBA, the loan must generally be used to acquire a single identifiable asset.

SMSF borrowing is subject to strict superannuation, taxation and lending requirements. Trustees must ensure the investment complies with the fund’s investment strategy and is maintained solely for the purpose of providing retirement benefits to its members.

With guidance from appropriately qualified financial, legal, tax and lending professionals, an SMSF loan may provide eligible funds with an opportunity to invest in property and support their long-term retirement strategy.

When you work with us, we’ll support you throughout each stage of the SMSF lending process. Our experienced brokers can assist with:

• Explaining the lending requirements for residential and commercial SMSF property purchases.
• Helping you understand the deposit and upfront costs that may be required.
• Comparing eligible SMSF loan options from our panel of lenders.
• Providing an estimate of how much your SMSF may be able to borrow.
• Explaining the differences between fixed and variable interest rates.
• Identifying potential ways to strengthen your loan application and borrowing position.
• Developing a lending strategy based on your fund’s circumstances and financial objectives.
• Managing the loan application process and keeping you informed from application through to settlement.

Important information

Before establishing an SMSF or purchasing property through your fund, you should seek advice from appropriately qualified and licensed professionals, such as a financial adviser, accountant and solicitor. They can help you determine whether an SMSF and property investment strategy are suitable for your circumstances.

Any taxation, superannuation, legal or investment-related questions should be directed to the relevant qualified professional. Our role is to provide credit assistance and help you explore suitable SMSF lending options.