Self Managed Super Fund Property Loans

Secure your financial future with expert advice on buying property with Super.

Get a call back from an experienced SMSF home loan broker

No matter what your circumstances, we will find the right home loan for you from our range of Australia’s leading lenders. We will do all the research and then present you with all your options.

SMSF property done right

Purchasing a property with your self managed super fund (SMSF) can be a complex process. Lenders offer a wide range of significantly different lending options for SMSF loans and there are strict ATO regulations on borrowing money to purchase a property with your self managed super fund. An SMSF loan set up incorrectly could cause you major issues .The team at Assured Lending have Mortgage Brokers with many years experience who specialise in SMSF loans. Our Brokers will give you the knowledge and support to make informed choices and get the right SMSF loan, fast and stress free.

Advantages of purchasing property using a self managed super fund loan

All costs & expenses are paid by the super fund so you are not required to save for a deposit or use funds from your everyday finances.
Capital gains tax won’t be paid if your SMSF purchases an investment property and sells it when fund members are in ‘pension phase’. This could potentially save hundreds of thousands of dollars in tax.
If the property is owned for more than 12 months, but sold before fund members are in pension phase, capital gains tax is capped at 10% which is much lower than a regular investment property.
The maximum tax payable on an SMSF property rental income is 15% which is much lower than an average Australian’s tax income rate.
All expenses for the property including rates, maintenance, insurance etc can be claimed as tax deductions by the SMSF.
Negative gearing can be used to reduce the tax paid as loan interest repayments can be offset against other taxable income earned by the SMSF.
SMSF loans are non-recourse loans, meaning that if you default on your loan, the bank cannot come after any other assets owned by your super fund.
A commercial property that is going to be used for business purposes can be purchased from a person who is related to the SMSF members and any business that is owned by the SMSF members can occupy the property as a commercial tenant.

Disadvantages of purchasing property using a self managed super fund loan

SMSF loans are generally more restrictive than a normal home loan.
SMSF loans will usually require a higher deposit amount.
SMSF loans usually do not allow you to redraw funds.
Interest rates for SMSF loans are usually higher than normal home loan rates.
Property choice is limited to established properties only.
The trustees of the SMSF are not permitted to live in the property until after retirement when the property title can be transferred from the SMSF into their own names. Prior to this, the property must be used as an investment only.
A residential property cannot be purchased from a person who is related in any way to the fund members.
A residential property cannot be leased to a person who is related in any way to the fund members.

Buying property with an SMSF home loan

A self managed super fund loan or SMSF property loan enables the fund to borrow money for the purchase of income producing property. Recent changes to the laws & regulations around SMSF loans have made buying property with super a more popular decision for many Australians. A self managed super fund can only loan money to purchase a property if the strategy is clearly outlined in both the SMSF trust deed and investment strategy statement. The property purchase has to be for the sole purpose of following the SMSFs investment strategy and creating wealth for retirement.All payments for the deposit, legal costs and stamp duty are made from your super fund. Once the property has been purchased, all costs associated with the property, including your loan repayments, are paid from the super fund and all income generated from the rental of the property are paid into the super fund. You as the Trustee for the fund have full control over all leasing, renovating and selling decisions.There are many different SMSF loan options from Australia’s leading lenders currently available on the market. Each loan has varying points of difference relating to cost, terms & conditions and structural requirements. To protect your future income, you need to have knowledge regarding the best loan options for your needs. Speak to a Mortgage Broker who specialises in SMSF loans to ensure you have the expert advice you need to make an informed decision.

Structuring your application with the right lender

A major factor in the success of any loan application is knowing the criteria and flexibilty of the lenders. Australian lenders have extremely strict requirements for SMSF loans and they offer a wide range of significantly different lending options. Because of the large amount of Self Managed Super Fund investment loans that we do, we know which lenders will be more favourable to your specific needs and we can structure a loan application for the highest chance of approval with the best outcome for your financial future.

What lenders look for with an SMSF loan application

Deposit: You will need to pay a deposit from your SMSF of least 20% of the property value. This percentage varies with different lenders.
Rental income: Projected rental income from the property is factored into your ability to make repayments.
Superannuation contributions: Lenders check how regularly and consistently all members of the SMSF make super contributions as these will be relied on, in conjunction with rental income, to meet your loan repayments.
Structure of SMSF: The way your SMSF is structured must be compliant with ATO and ASIC rules.

SMSF INVESTMENT PROCESS

Steps to an optimal
SMSF investment property

No matter what your circumstances, we will find the right home loan for you from our range of Australia’s leading lenders. We will do all the research and then present you with all your options.

Talk with our broker

Step 01

SMSF Setup and Consultation

Start by establishing your Self Managed Super Fund (SMSF). Consult with your accountant or financial adviser to understand SMSF lending rules and ensure this strategy aligns with your financial goals.

Step 02

Property Trustee Appointment

Appoint a property trustee who will act on behalf of your SMSF to purchase the property. Seek guidance from your accountant or financial planner during this process.

Step 03

Mortgage Broker Selection

Choose a specialised SMSF lending Mortgage Broker who will assist you in selecting the right lender. They will also ensure you understand SMSF loan property requirements, lender rates, terms, and conditions, and advise you on your maximum borrowing capacity.

Step 04

Mortgage Application Preparation

An Assured Lending mortgage Broker will assemble your pre-approval SMSF loan application and liaise with the lender on your behalf.

Step 05

Property Selection

Select an investment property that meets the criteria set by lenders for SMSF loans.

Step 06

Deposit and Contract Exchange

Upon loan approval, your property trustee uses your SMSF funds to pay the deposit, legal costs, loan fees, and stamp duty. Contracts are then exchanged.

Step 07

Settlement Process

At settlement, the property trustee mortgages the property to your lender, who pays the balance of the property purchase.

Step 08

Rental Income and Property Management

Once the property is leased, your SMSF begins receiving rental income. Your SMSF is responsible for covering property-related costs and making loan repayments, similar to any other real estate investment.

Step 09

Property Ownership Transition

The property is held in trust for your SMSF by the property trustee. After loan repayment, you can choose to transfer the legal title to your SMSF or opt to sell the property.