The Features & Benefits of SMSF Loans

The Benefits of using SMSF to purchase Real Estate

• Your SMSF can acquire property worth more than its available funds through the benefits of gearing.
• Your SMSF assets are secure as the lender does not have recourse to your SMSF's other assets in the event of default.
• Your SMSF receives all income and capital growth even if the property has not been paid off.
• Your SMSF can use income from the property to help pay off the loan.
• Interest expense may be claimed as tax deductions by the SMSF and potentially reduce your SMSF's tax liability.

To obtain more information on how these new changes can benefit you, Click Here to visit our new Self Managed Super DVD Information page.

Features of SMSF Loans

• The SMSF must purchase property from an unrelated party. Purchases must be arms-length.
• Investment in property must be consistent with your SMSF investment strategy.
• In the event of a loan default the lender only has recourse to the security property and cannot claim any other SMSF assets.
• The property is held in trust for the SMSF which is entitles to its income.
• Your SMSF makes the loan repayments. After the loan is repaid the legal ownership of the property is transferred to the SMSF.
• Choose any kind of property including residential, commercial or retail property.
• The legal owner of the real estate will be the Property Trustee.
• The beneficial owner of the real estate will be the SMSF.
• The lender has no recourse to the other assets of the SMSF, providing the SMSF with absolute protection for its other assets.
• SMSFs can deal with the property however and whenever they like, in the same way as investors can deal with "normal" investment properties (eg: lease, renovate, repair, or sell), (subject to the terms of the relevant loan and mortgage).
• All rents are paid direct to the SMSF. Loan repayments are made in the ordinary way from the SMSF.
• The SMSF can pay out or reduce the mortgage at any time (subject to the terms of the relevant loan).
• When the mortgage is paid out in full, title to the property can be transferred to the SMSF or the Property.
• Trustee can continue as registered proprietor.

PRODUCT SPECIFICATIONS
Rate	Variable or Fixed
Repayment Options	I/O up to 10yrs
Term	up to 25yrs
Max Loan Amount	$5 million
Max LVR	72% LVR for Residential 65% LVR for Commercial 50% LVR for Rural
Purpose	Purchases Only
Acceptable Location	Subject to postcode acceptability

The importance of financial planning

There are a number of rules and regulations surrounding superannuation and planning for retirement. Your Financial Planner can provide advice about borrowing strategies for SMSFs that is personalised to your situation and goals. You should also seek professional tax and legal advice.