SMSF Loans
Thinking about investing via your Self Managed Super Fund (SMSF)? Work with the experts...
SMSF loans can be used to secure residential or commercial properties in a tax effective environment. These arrangements are complex to establish, therefore we recommend doing so with the advice of your financial planner, solicitor and accountant.
Our aim is to equip you with as much information as possible, allowing you to understand the risks, costs, and rules associated with setting up a self-managed superannuation fund to invest in property.
There are a number of rules when it comes to SMSF property investment, namely the sole purpose test, ensuring that residential transactions are 'arms length', not living in the property, not developing the asset and not renting residential properties to a relative. Please consult your advisors for the latest information.
Key benefits of using Evoke:
- Advice from award-winning mortgage and finance brokers with over 25+ years experience
- Access to specialist lenders who allow you to borrow up to 80% LVR on both residential and commercial properties
- Peace of mind that you are always getting the best deal with 6-monthly interest rate reviews and annual strategy sessions
- Access to your own personal finance broker for the life of your loan
For more information about SMSF lending, request a call below.
SMSF FAQ
What does SMSF stand for?
Self Managed Superannuation Fund
What is a SMSF?
A SMSF is a Self-Managed Super Fund which is a private superannuation fund which allows you to control your own superannuation investment decisions and investments.
What is a SMSF loan?
A SMSF loan is where your SMSF is/has taken a loan to acquire an investment.
Can SMSF loans borrow money?
Yes. SMSF loans can borrow money to invest in either property or managed funds or shares. It is worth noting that it is understandably heavily regulated and generally prohibited. SMSF loans are essentially what is called a Limited Recourse Borrowing Arrangement (LRBA) which means that in the event of a default, the Lenders recourse is limited to the asset the loan is tied to and not other assets in the Super fund.
How much can a SMSF borrow?
Each lender has different limits on minimum sized loans and maximum sized loans. These range from $100,000 up to $25,000,000.
What is limited recourse borrowing?
As per the ATO, Limited Recourse Borrowing Arrangement is where a SMSF Trustee takes out a loan with a third party lender to purchase a single asset to be held in a separate trust. In the event of a default the lenders duty to pay off the loan is limited to the investment that was purchased with the loan.
What is a bare trust?
A bare trust is a separate trust from the SMSF which enables the SMSF lending structure to take place. Your financial advisor or accountant will be able to confirm the best structure for you.
Disclaimer: Subject to the lender's terms & conditions and credit approval criteria. Please ensure you seek your own personal legal and taxation advice for your situation.