SMSF Property Loans

Cashflow Recovery helps superannuation trustees, members and their financial advisers, accountants and lawyers access SMSF Loans to purchase Residential or Commercial property. Finance is sourced from a panel of Lenders who specialise in lending to Self-managed Super Funds (“SMSF”) Suitable property investments  include Residential and Commercial Property and Business Premises of business owners. Loans are available from $30,000 to $5m in Metro and Regional areas of Australia.

Typically a standard SMSF Loans will be up to 70% of a residential property value, with some lenders prepared to lend 80% of the property value (Residential), and 70% for Commercial property.

Some Lenders can offer Refinancing existing SMSF Loans for approved property and this may lower funding costs over the longer term. If your interested in refinancing an existing SMSF loan, talk to us.  

What is a SMSF home loan?

These types of loans allow you to borrow money through your SMSF to purchase an investment property. Standard SMSF Loans are typically up to 70% of the property value, with some lenders prepared to got to 80% of the property value and 70% for Commercial property

If you already have an SMSF account set up and are looking to buy a investment property, this option lets you use your super funds as a deposit for the property..

These loans are almost identical to regular home loans in that you borrow an amount to buy a home and you then have to pay that amount back over a fixed period. SMSF home loans are also limited recourse loans, which means the amount your lender can recover from you is limited to the value of the property you purchase. In other words, if you default on your loan, your lender can’t seize any other assets in your SMSF.

These loans also have much more complicated structures and compliance processes than normal home loans so aren’t offered by every lender. We help SMSF Trustees search for the best SMSF home loan, then arrange the paperwork to implement the loan with the new lenders.

How do SMSF Loans work?

An SMSF is a self-managed super fund that has less than five members. Investment selection and management is controlled by the members. An SMSF allows you to take control of your super assets and look after how your funds are managed. Australians are allowed to borrow money to purchase property through their super funds, which is where SMSF home loans come in.

Once you’ve found a property you wish to buy, you’ll need to decide who will act as custodian of the property. The custodian will hold the property title on your behalf until you have paid off the loan amount. The arrangement is called a Limited Recourse Borrowing Arrangement (LRBA) Once you’ve applied and been approved for a loan, the property is put up as security and you can begin making repayments. You can also start collecting rent from the property and will need to cover any day-to-day property expenses that arise. If the rental income doesn’t cover your repayments, the rest can be managed via your SMSF contributions and income from the SMSF’s other investments. Once you’ve paid off the loan in full, the property title is transferred to the SMSF.

Suitable Property

Special rules apply for the usage of SMSF assets and SMSF trustees should familiarise themselves with the rules.  Property purchased for a SMSF are 

  • Residential Investment Property – for Rent
  • Off The Plan Purchases – for Rent
  • Commercial Property – for Rent
  • Commercial Property – own business premises

If you need help with a SMSF Loan contact us on 1300 885 244 or contact us