Using your super to buy property gives you access to some of the best tax incentives for investing in property. But it’s essential to get the right structure to meet the ATO’s strict borrowing rules and to allow your investment the scope to flourish.
SMSF Loan Experts give accurate, informed advice based on years of experience across all stages of the SMSF buying process. And because we have our own credit license, we have access to some of the most competitive loans on the market.
Understanding SMSF Residential Loans
- Loan to value ratio can be up to 80%
- Interests rates generally are about 2%-2.5% higher than traditional residential loans
- Can be used to purchase house, townhouses and apartments
- Can not be used to build a house (i.e. no progress payments allowed
- Can not be used for vacant land
- Legal and application costs generally range between $1,500 - $3,000
- We recommend 60 days settlement for SMSF purchases, even though we have achieved <10 days settlements on occasions
- Servicing is met by using 80% of the rental income + the members’ employers guaranteed super contributions and salary sacrifice – the loan repayments at qualifying rate – SMSF running costs
- SMSF loans are most often harder to service than normal loans
- Most lenders now have post settlement liquidity requirements, which means that they are expecting your SMSF to hold a minimum amount of cash or shares after settlement. A few select lenders do not have such requirements.
- Require a personal guarantee by the SMSF trustee(s)