We understand SMSF Loans
Leading Self Managed Super Fund
Property Finance Solutions
Global Capital Commercial is uniquely placed to assist you with our direct access to all lenders currently offering SMSF loans, with access to not only the banks but also to private non-bank lenders.
What is a Self-Managed Super Fund?
Self-managed super funds are a powerful way to save for retirement, letting that ever-important nest egg grow to ensure your retirement days are stress-free and the funds you require to live comfortably are on hand. Self-managed super funds put the power back in your hands, giving you the ability to make investment decisions.
If you have a self managed Super Fund, your fund can now borrow funds to purchase a property, whether this is residential, retail, commercial, rural or specialised use or zoning.
Full Market Access
Global Capital Commercial is uniquely positioned to assist you via direct access to each lender which currently offers SMSF loans, bringing options to the table for consideration not only from banks, but also from private non-bank lenders. This complete market coverage allows for oversight that leads to a full analysis of the competitive advantages of each lender, providing you with the information you need to make an informed decision that will best suit your SMSF needs and allow you to achieve your retirement goals.
Changes to SMSF legislation from the Superannuation Industry Supervision Act (SIS ACT) in 2007 mean that if you have a self-managed super fund, you can now borrow funds in order to purchase a property, whether it’s residential, retail, rural, or has a specialised use or zoning. These changes were amended to allow self-managed super funds to borrow money as long as an acceptable structure was utilised.
This structure is reﬂected in a Security Trustee, which will purchase the property on behalf of the SMSF, becoming the property holding’s legal owner and holding it in trust for the SMSF as beneﬁcial owner. The SMSF is able to provide an equity contribution from its superannuation funds and to then borrow the balance required to complete the purchase.
By putting the choice back in your hands, you’re able to make an impact on your retirement years through astute investment choices with the power of superannuation funds at your investing disposal now.
Self Managed Super Fund loans- general features:
- Residential Property loan applicants can borrow up to 80% LVR on terms of up to 30 years
- Commercial property loans can be approved for up to 70% LVR with a term of up to 20 years
- Rural property loans can be approved for up to 65% LVR on terms of up to 20 years
- Interest only is available for all facility types with varying terms available
The true key beneﬁts of SMSF loans are reﬂected in the greater pool of investment choices available to you and the deeper level of control over your future.
Rather than leaving your retirement future in the hands of a large superannuation fund, you’re able to invest your super in areas where you believe there is strong potential for future growth, which in turn, will grow your nest egg and leave you well positioned to embrace your retirement years with increased ﬁnancial security and freedom.
SMSF Finance Facilities, the Basics:
- SMSF loans are funds which are loaned to a self-managed super fund in order to assist with the acquisition of eligible income-producing real estate;
- The funds borrowed are applied to the purchase of an asset;
- This asset is held in trust and the self-managed super fund acquires a beneﬁcial interest in the asset;
- The SMSF has the right to acquire legal ownership by ﬁnalising payment;
- SMSF loans are ‘Limited Recourse’, which means the lender is not able to access any further assets held by the SMSF other than the property held as security. This means that even in the event of a default, the rights of the lender against the SMSF are limited to the security property, ensuring the safety of the SMSF’s portfolio across other investments.
Restrictions to SMSF Finance Facilities, potential borrower must be aware of:
- No construction or refurbishment
- Member/s of the SMSF cannot reside in the residential property but can purchase a residential property that they intend to move into after retirement, subject to it being transferred out of the Self Managed Super Fund
- No vacant land. The only vacant land that is acceptable is income-producing rural land, such as a working farm
- No redraw facility is available
- All property purchases have to be on a ‘stand-alone’ basis
- An existing asset can be refinanced providing it meets the requirements of the SIS Act
- No leveraging of existing property is allowed however you can borrow to repay existing SMSF loans plus costs.