SMSF Loans

Like other superannuation (super) funds, self-managed super funds (SMSFs) are a way of saving for your retirement. The difference between an SMSF and other types of funds is, generally, that members of an SMSF are the trustees. This means the members of the SMSF run it for their own benefit.

People set up their own SMSF for control, flexibility and personal investment choice. You get to decide on your fund’s investment strategy and choose what your fund invests in and like all super funds the tax rate of an SMSF is 15 percent.

You can only buy property through your SMSF if you comply with the rules.

The property:

  • Must meet the ‘sole purpose test’ of solely providing retirement benefits to fund members
  • Must not be acquired from a related party of a member
  • Must not be lived in by a fund member or any fund members’ related parties
  • Must not be rented by a fund member or any fund members’ related parties

Loans for residential property

SMSFs can use borrowed monies to assist in purchasing a residential investment property within the super fund. The property must be held in trust for the SMSF until the loan is repaid. In saying that, there are far fewer lenders in the SMSF space given the complexities involved.

Security of a limited recourse loan – rights of recovery against the SMSF are limited to the secured property. All other assets held in the SMSF are protected.

Rental income can be used to demonstrate serviceability – rental income from the investment property can be used to repay the loan.

Integrates easily with existing SMSFs – the loan structure is designed to easily integrate with most SMSFs.

Charter Finance

Find out if you qualify

Get in touch with Charter Finance today and let us chart this journey with you!