Self Managed Super Fund Lending
The recent introduction of Legislation allowing gearing in SMSF’s has allowed investors to purchase property via their Super Funds.
Superannuation funds including SMSF’s, can now borrow using a type of loan structure with limited recourse.
SMSF’s are now permitted to borrow provided the SMSF trustee borrows the money in accordance with an arrangement that has the following features:-
- The borrowing is used to acquire an asset.
- The asset is held on trust so that the SMSF trustee receives a beneficial interest and a right to acquire the legal ownership of the asset (or any replacement) through the payment of installments.
- The lenders recourse against the SMSF trustee in the event of the default on the borrowing and related fees, or the exercise of rights by the SMSF trustee, is limited to rights relating to the asset.
- The asset (or any replacement) must be one which the SMSF trustee is permitted to acquire or hold directly.
Super is one of the most Tax effective ways of funding Real Estate Investment in Australia. Superannuation investments are concessionally taxed (15% on income and 10% on capital gains) and can even be tax free for people over 60.
So avail yourself with this great opportunity to create and build wealth.