Self-Managed Super Funds (SMSFs) operate in a manner similar to other superannuation funds. Throughout your career, you contribute to your fund, which is then invested to build wealth for your retirement years.

Thinking about starting a new SMSF? Absolutely, you can! When you establish a new SMSF with the assistance of your accountant or financial planner, you can apply for an SMSF loan. To proceed, you’ll need to show a history of contributions from your previous super funds and obtain confirmation from your financial advisor or accountant that your assets are being transferred to your new SMSF.

For property investments, an SMSF can purchase both residential and commercial properties, with certain conditions:

• The property must be bought for investment purposes and rented to an unrelated party at market rates.
• The investment shouldn’t involve property development or construction, and vacant land is generally excluded.
• The investment must meet the Australian Taxation Office’s (ATO) ‘sole purpose test,’ ensuring the fund is maintained solely to provide retirement benefits to its members.
• The property cannot be purchased from, sold to, or occupied by a fund member, their family, or any close associates.

However, a commercial property owned by the SMSF can be leased to a business owned by a fund member, provided it complies with specific conditions and the rent aligns with current market values.

When purchasing through an SMSF, only properties with a single title per contract are permissible. For example, if you wish to buy a duplex that spans two titles and is being sold as one, you would need to restructure the purchase into two separate transactions with individual loans.

If you’re interested in expanding your SMSF investment portfolio or have further questions about the benefits of an SMSF, feel free to contact us today. We’re here to help you navigate the complexities of SMSF property investment and provide a lending solution that enables you to take advantage of this opportunity.