{"id":407,"date":"2023-02-13T13:53:09","date_gmt":"2023-02-13T02:53:09","guid":{"rendered":"https:\/\/ghfs.com.au\/?page_id=407"},"modified":"2024-04-18T13:18:34","modified_gmt":"2024-04-18T03:18:34","slug":"smsf-loans","status":"publish","type":"page","link":"https:\/\/ghfs.com.au\/services\/smsf-loans\/","title":{"rendered":"Self-Managed Superfund Loans"},"content":{"rendered":"\n

Is a SMSF loan right for you?<\/strong><\/h1>\n\n\n\n

A growing number of Australians are taking control of their retirement planning and switching to self-managed super funds (SMSF); and with the introduction of limited recourse borrowing arrangements (LRBA) in 2010, SMSF trustees can now borrow funds to purchase investments like commercial and residential property.<\/p>\n\n\n\n

Borrowing criteria<\/h2>\n\n\n\n

SMSF borrowing is highly regulated and the lending criteria tend to be stricter than they are for individuals applying for a home loan. Tight regulations around LRBA’s limit the recourse of a lender to the security asset only, minimising risk to the superannuation fund in the event of a default on the loan.<\/p>\n\n\n\n

To achieve this, a separate property trust and trustee must be established to hold the property on behalf of the super fund. All the income and expenses of the property go through the super fund\u2019s bank account. If the fund fails to meet all repayments, the lender only has the property held in the separate trust as recourse, and cannot access the remaining assets of the super fund. To avoid default, your SMSF must always have money available to meet the loan repayments. The SMSF can fund the loan repayments through rental income on the property and through superannuation contributions.<\/p>\n\n\n\n

What type of property can a SMSF invest in?<\/h2>\n\n\n\n

You can get a SMSF loan to purchase commercial or residential property provided the sole purpose of the loan is to provide retirement benefits to the fund\u2019s members. In other words, you cannot live in a property you purchase through your SMSF.<\/p>\n\n\n\n

In order to pass the mandatory sole purpose test, an investment property:<\/p>\n\n\n\n