SMSF Borrowing:

Self Managed Super Funds Borrowing to buy property.

Wondering about how a SMSF can borrow to buy property? We've been helping clients use SMSFs borrow money to buy property since it became possible in 2007. Below you'll find a snapshot of how SMSF borrowing works – and some important points you should know about.

Need more detailed information or specific advice? If you'd like to talk about setting up an SIS compliant SMSF, or how you can benefit from SMSF finance, simply contact us or call 1300 781 680.

Sourcing the right property

Your SMSF exists to make money, and provide for your retirement. So take time to ensure that the property your fund is looking to purchase is able to deliver on your fund's overall investment goals.

SMSF Borrowing Pre-approval

While you can enter into a contract without pre-approval for self managed super fund borrowing being given, there are potentially significant stamp duty costs associated (see Signing Contracts below) with signing a contract without having a Trustee in place.

Select a Trustee for self managed super fund borrowing

When your SMSF purchases real estate, the property is held on trust. You'll need to determine a Trustee who will hold legal title to the property.

Complete documentation to enable SMSF borrowing.

Once you've selected a Trustee, you'll need to complete the necessary documentation to enable borrowing and purchase of real estate, these include Bare Trust and Super Fund Trust deeds.

Update your Self Managed Super Fund Investment Strategy

Remember, any investment, including the purchase of real estate, needs to be consistent with your funds overall investment strategy. If you've already prepared an investment strategy, it may need to be reviewed and update according to your current goals.

Signing Contracts

Contracts should be signed by the Bare Trustee, and the Bare Trustee noted on the contract, to avoid potentially significant stamp duty implications. This is why it's a good idea to select a Trustee and gain pre-approval before signing a contract.

SMSF borrowing & Settlement

When the purchase is settled, the fund's Trustee will become the title-holder. The SMSF becomes the beneficial owner, with any income derived from the real estate flowing into the fund itself.

About Super Finance

At Super Finance, we've been helping clients with SMSF Borrowing to secure property since its inception in 2007 – and have he experience and expertise to help you capitalise on the benefits SMSF real estate.