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SMSF Loans

Borrowing within a self-managed super fund is tightly regulated. We help trustees understand the lending side.

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SMSF lending, arranged with care

A self-managed super fund can borrow to buy property, but only in a particular way. The loan must be set up as a limited recourse borrowing arrangement, with the property held in a separate holding trust on behalf of the fund. If the loan is not repaid, the lender's claim is generally limited to that one property, which is why these loans are assessed and priced differently from ordinary home or investment loans.

MAXLEND arranges the lending only. Whether buying property through super is appropriate for you is a decision to make with a licensed financial adviser and your accountant, and many lenders will ask for confirmation that you have received advice.

What lenders look for

Fewer lenders offer SMSF loans, and their policies vary. They commonly look at the fund's balance and contribution history, the rental income the property is expected to produce, and how much cash the fund would hold after the purchase. Deposits are often larger than for a standard investment loan. The fund's trust deed and investment strategy must also allow the borrowing and this type of investment.

Rules worth knowing early

Superannuation law places limits on what a fund can buy and how the property can be used. Residential property generally cannot be bought from, lived in by or rented to fund members or their relatives, and there are restrictions on making significant changes to a property while the loan is in place. Your adviser and accountant will guide you on these rules; our role is to explain what lenders require and to make sure the finance is ready when the structure is.

We compare suitable SMSF loans, explain each lender's requirements and work alongside your advisers and solicitor so the documents are prepared in the right order.

How a MAXLEND broker helps

  • Lenders that offer SMSF loans

    We identify lenders that offer SMSF loans and explain what each one requires.

  • Requirements made clear

    We explain deposit, cash reserve and documentation requirements before you commit to a purchase.

  • Working with your advisers

    We coordinate with your financial adviser, accountant and solicitor so each step happens in order.

  • Lending only, stated plainly

    We arrange the loan. Advice on whether to invest through super comes from your licensed advisers.

What an SMSF loan can be used for

  1. Residential investment property

    Bought as an investment for the fund. Fund members and their relatives generally cannot live in or rent the property.

  2. Commercial property

    Including, in some cases, premises leased to a member's own business on commercial terms.

  3. Refinancing an existing SMSF loan

    Reviewing a current limited recourse loan against other suitable options.

How SMSF lending works

A clear process from first conversation to settlement, with a MAXLEND broker beside you at each step.

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  1. Speak with your advisers

    Confirm with your financial adviser and accountant that the strategy suits your fund.

  2. Review the fund

    We look at the fund's position and what lenders will require.

  3. Compare lenders

    We compare suitable SMSF loan options and explain the differences.

  4. Apply and settle

    We manage the application with the lender and your advisers through to settlement.

Important to understand

Borrowing inside a self-managed super fund is done through a limited recourse borrowing arrangement, with the property held in a separate holding trust. The rules are strict: the fund's trust deed and investment strategy must allow the borrowing, and the purchase must meet the sole purpose test.

Fewer lenders offer SMSF loans, and they often require larger deposits and a level of spare cash in the fund after the purchase. MAXLEND arranges the lending only. Whether buying property through super is appropriate for you is a decision to make with a licensed financial adviser and your accountant.

Documents you may be asked for

  • The SMSF trust deed and, later, the holding trust deed
  • The fund's financial statements and tax returns
  • Statements showing member balances and contributions
  • The contract of sale and, for commercial property, the lease
  • Identification for all trustees or directors

General information only. A broker can explain how it applies to your circumstances.

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SMSF Loans: common questions

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Can my SMSF buy a property I already own?

Generally a fund cannot buy residential property from a member or a related party. There is an exception for business real property, which has its own conditions. Please confirm your situation with your adviser.

Can I live in a property owned by my SMSF?

No. Residential property held by the fund cannot be lived in or rented by fund members or their relatives.

Do I need advice before getting an SMSF loan?

Yes. We arrange the loan, but the decision to invest through super, and to borrow to do it, should be made with a licensed financial adviser and your accountant. Many lenders ask for confirmation that you have received advice.

Before borrowing through your super fund

SMSF lending is tightly regulated. These points should be settled before a loan application is made.

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  • Get advice first

    Whether buying property through super suits you is a question for a licensed financial adviser and your accountant. We arrange the lending only.

  • Check the fund documents

    The trust deed and the investment strategy of the fund need to allow borrowing and this type of investment.

  • Understand limited recourse

    The loan is secured against the single property held in a separate trust. That structure has set up costs and rules about changes to the property.

  • Keep cash in the fund

    Lenders usually want the fund to hold spare cash after the purchase, and the fund must still be able to meet its other obligations.

Ready to talk about smsf loans?

Book a time with a MAXLEND broker. There is no obligation.

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