SMSF Loans

How It Works

How it Works

Obtain professional advice from an Australian financial services licence (AFSL) holder if you are contemplating setting up an SMSF or borrowing via your SMSF. Investing in property has some risks. Signing a contract of sale before setting up an SMSF may be a contravention of the sis act, with serious tax implications for your SMSF. For any contract of sale that you want to settle inside your SMSF, please get independent legal counsel; we are not legal experts and do not give legal advice. We do not become engaged in the acquisition process or sign contracts.

The SMSF Trust Deed must have the clause giving the Superannuation Fund Trustee thr power to enter into  Limited Recourse Borrowing Arrangements . 

The proposed purchase must comply with the Superannuation Industry Supervision Act 1993 (SIS Act) and be in line with the SMSF’s overall investment strategy (including but not limited to the “in-house asset rules” and the restrictions on acquiring assets from “related parties”).

Before you sign a real estate contract and pay a deposit, get a loan pre-approval from your lender. Before the loan pre-approval is given, there is no point in setting up a Custodian Property Trust.

After obtaining pre-approval, you may set up the Bare Trust Structure. The Bare Trust is also known as a Holding or Custodian Property Trust. The Bare Trust Deed establishes the connection between the custodian, who owns the property as trustee for the superannuation fund and grants a mortgage over the property to the lender.

Bare Trust deed may need to be signed before the contracts can be exchanged, subject to lender requirements.

As soon as contract is exchanged , subject to financing, the deposit can be paid by an SMSF. The Custodian Property Trust Trustee will buy the property from the seller. It must be signed by the Custodian Property Trustee instead of the SMSF or the SMSF trustees or members.

Submit the Bare Trust Deed to the State Revenue Office for a payment of stamp duty if applicable:

Once you have signed the contract and given us the documents, the lender will order the valuation. Formal approval for your SMSF loan will be given once all of the lender’s requirements are met.

The lender will appoint solicitors to write up your mortgage documents, and they will be given to you to sign. The borrowing structure for an SMSF is based on normal loan and mortgage documents, but they have special clauses that allow the limited recourse against the property being bought.

The purchase is completed after registration of the transfer on the mortgage to the Trustee of Custodian Property Trust. This will be arranged by your solicitor. 

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Why use us ?

Purchasing An Investment Property Is A Complicated And Possibly Stressful Process. Appointing A Skilled Mortgage Broker Will Ensure That The Necessary Groundwork Has Been Completed And That The Finest Lender And Offer Have Been Selected.

Limited Recourse Borrowing Arrangements Available To Smsfs Are Complex Due To The Specific Requirements, Legislative Issues And Lender Limitations Imposed On This Type Of Loans. SMSF Loan 360 Expertise In The Field Of SMSF Mortgage Broking Services.

SMSF Loan 360'S Strong Grasp Of The Legal And Regulatory Requirements Involved With SMSF Loans, As Well As Its Expertise Of The Lending Markets, Enables It To Deliver The Fastest And Most Cost-Effective Loan Solutions.

Being Independent And Not Affiliated With Any Lender We Recommend Lenders From The Whole Of The Market, Making Sure The Most Suitable Loan Is Tailored For The Customer.

We Recommend That You Have An Initial Consultation With Us Before You Start Looking For A Property To Get An Idea Of How Much You Will Be Able To Borrow, Whether The Investment Property Address Postcode Is Acceptable To Lenders, And, Most Importantly, Whether Your SMSF Structure And Current Trust Deed Allow LRBA.