Self-managed Super Fund Investment Property

SMSF Finance Facilities, the Basics
A SMSF Loan is to a Self-Managed Super Fund to assist in the acquisition of eligible income producing real property; the money borrowed is applied to the purchase of an asset; the asset is held in trust and the self-managed super fund acquires a beneficial interest in the asset; the Self-Managed Super Fund has the right to acquire legal ownership by finalising payment; the SMSF facility is 'Limited Recourse', meaning the lender cannot touch any other of the Self-Managed Super Fund's assets other than the property held as security, in other words the rights of the lender against the Self-Managed Super Fund in the event of the facility defaulting are limited to the security property.
Self-Managed Super Fund facilities, general features
Residential Property borrowing up to 80% LVR and up to 30 year terms Commercial Property up to 70% LVR and up to 20 years Rural Properties up to 65% LVR and up to 20 years Interest only is available for all facility types with varying terms available
There are also restrictions to SMSF Finance Facilities which any potential borrower must be aware of
No construction or refurbishment Member/s of the SMSF cannot reside in the residential property but can purchase a residential property that they intend to move into after retirement, subject to it being transferred out of the Self-Managed Super Fund No vacant land. The only vacant land that is acceptable is income-producing rural land, such as a working farm No redraw facility is available All property purchases have to be on a 'stand-alone' basis An existing asset can be refinanced providing it meets the requirements of the SIS Act No leveraging of existing property is allowed however you can borrow to repay existing SMSF loans plus costs.
Key benefits: (subject to discussion with your financial planner and/or accountant)
Maximum of 15% tax on rental income Any expenses such as interest, may be claimed as tax deductions by the super fund Potentially there may be no capital gains tax on sale of property, if sold in pension phase A maximum 10% capital gains tax on sale of property if held for at least 1 year Greater investment choices and control over your future The fund can pay out or reduce the borrowings at any time (subject to the terms of the relevant facility) Through gearing, the fund can acquire property for a greater value than that of the funds 'net worth' All other Self-Managed Super Fund assets are safe and cannot be touched by any lender, due to the limited recourse provisions in section 67 (4A) of the SIS (Superannuation Industry - Supervision) Act

As the number of Self-Managed Super Funds have exploded in recent years, the demand for SMSF loans for both residential and commercial property has increased.

What many investors don’t know is that SMSF lending is significantly different from obtaining regular residential or commercial loans.

In order to get a fast approval and a competitive interest rate, it pays to deal with a mortgage broker who is specialised in the SMSF space.

At AKL Finance Group we can offer you a full package solution including arranging the SMSF finance facility together with introducing relevant professionals to assist with providing the necessary legal structure to comply with the required legislation.

To find out more please call us or use our APPLY ONLINE button to allow us to answer all of your questions and to tailor a financial solution that suits your individual specifications.