Super Fund Loans

Investment in property is considered to be one of the safest forms of investment with history demonstrating strong returns over long periods of time. In the past, it has been difficult for Self Managed Super Funds (SMSF) to invest in property as funds would need to be cash rich to enable them to purchase any type of property asset.

As a result of changes to the Superannuation Industry Supervision act (SIS Act), there is now an opportunity to borrow money for investment in Real Estate through a Self Managed Superannuation Fund (SMSF) structure.

New legislation enables a property trustee or “custodian” to borrow funds from Financial Institutions to assist with the purchase of an asset on behalf of a SMSF. The asset is held in trust and title is passed on to the SMSF once the loan has been repaid.

This new legislation provides an opportunity to utilise funds held in your SMSF for the purpose of paying a deposit for the purchase of an asset, with the balance of the funds required to complete the purchase provided via a loan. The loan is made on a “no recourse” basis, which protects the balance of the assets of the SMSF.

Some examples of how you are able to take advantage of the new legislation are:-

• Purchase of your own business premises.
• Purchase of Commercial Investment property.
• Purchase of an “arms length” Residential Investment property.

If you are interested in obtaining more information about this product, we recommend that you contact an LKFS Consultant in conjunction with your Accountant to discuss the suitability of this product to your specific needs.