As a result of amendments in September 2007 to the Superannuation Industry Supervision (SIS) Act 1993, it is now possible for a regulated Self-Managed Superfund (SMSF) to borrow to acquire investment property as an asset under strict specific conditions; the asset must be acquired by a third party and held in trust for the SMSF.
The type of properties that a SMSF can acquired are:
- Residential property for investment
- Non specialised commercial property for investment
- Non specialised rural property for investment
Before embarking on this strategy the first thing you need to do is to discuss your SMSF strategy with a financial planner. (MZONE Advice can provide such a service).
Mortgage Zone will assist you with loan product selection that is suitable. We are familiar with lenders' requirements for SMSF transactions. There are several important issues that you need to consider, such as how much a lender will lend against what type of property. These can have a great impact on the upfront funds that your SMSF ought to have and how much ongoing contribution is required to be able to service the loan required. Generally you cannot have a loan with redraw, offset or interest capitalisation. We have a panel of lenders with a range of products with varying fee structures that are suitable for this purpose. We would recommend that you talk to us first before making a purchase to achieve an optimal outcome.