Self Managed Super Fund Loans

Taking Control of Your Super Funds: SMSFs and Property Investment

In recent times, more individuals are opting to take control of their superannuation funds, allowing them to choose where and how their investments are made. One avenue for achieving this is through a Self-Managed Superannuation Fund (SMSF).

SMSF Borrowing for Property Purchase:

• In 2007, the Superannuation Industry Supervision Act (SIS Act) was updated to allow SMSFs to borrow funds for purchasing assets such as residential and commercial properties.

• However, strict regulations govern SMSFs to ensure proper conduct. Annual audits must be reported to the Australian Taxation Office (ATO), which may incur additional accounting fees.

• Before proceeding, seek financial advice to assess the suitability of an SMSF based on your current super fund value and contributions.

Where to Seek Advice:

• Financial planners can provide advice on SMSFs, consider consulting a specialist who can offer comprehensive guidance on both the financial and structural aspects. This approach streamlines the process by avoiding separate interactions with a financial planner and an accountant.

Purchasing Property via SMSF:

• After receiving financial advice and confirming your decision to proceed with an SMSF property purchase, engage the services of your broker.

• Assess your current super value and long-term goals to compare borrowing options for the proposed property type.

• Different lenders have varying policies, interest rates, and fees related to SMSFs. Applying for pre-approval is crucial, as specific SMSF structure or setup requirements may impact costs and efficiency.

Refinancing Existing SMSF Loans:

• In some cases, you can refinance your current SMSF loan. Regular reviews, like standard loans, are advisable.

Lender Differences:

• Lenders vary in terms of maximum Loan-to-Value Ratios (LVRs), interest rates, and fees. Avoid assuming that your existing bank will always provide the best terms; explore other options.