loans
SMSF loans
Investing in property to generate income for self-managed-super fund members.
Buying an investment property can be a tactic to build your superannuation through rental income being returned to the self-managed-super-fund (SMSF). And if the investment property is sold, the sale proceeds are paid into the SMSF.
Like any investment strategy, the potential gains must be assessed in view of the time and money spent to effectively run the SMSF.
Getting professional advice is always needed.
How SMSF loans work
Property criteria
SMSF structure/considerations
Residential or commercial
Loans 70-80% of purchase price (the Bare or Custodian Trustee is the borrower—i.e. the SMSF entity can’t borrow)
SMSF members can never live it in, not even in retirement
Must have sufficient funds to cover repayments, stamp duty, insurance, rates, and maintenance costs
Can’t be purchased/acquired from a SMSF member
Members and SMSF assets are protected from the lender
Can’t do major renovations on the property (SMSF regulations say funds can’t be used within the construction industry)
Can’t offset tax losses from the property against taxable income paid separate to the SMSF
Key points about lending
- Not all lenders offer SMSF home loans.
- Potentially borrowers will pay higher rates on repayments.
At Get Real Finance, we’re the friends with expert benefits. We have great professionals in our network who give specialist advice and services.
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