For residential property up to 30 years. For commercial property up to 15 years. This will vary between lenders.
Yes – for periods up to 15 years, depending on the loan and lender.
Rates can be fixed for varying periods from 1 year up to 10, 15 years – depending on the loan and lender selected.
Loans can be as small as $30,000 and there is really no upper limit – subject to lender approval of the property and SMSF borrowing capacity.
Varies between lenders. As a guide:
Residential property: up to 80%
Commercial property: up to 70%
Non Income-producing rural or lifestyle properties: up to 70% (lower for specialised security)
You will need to establish a SMSF and Trustee as well as a Bare Trust (Security Trust) and Trustee. You will have all of the normal costs associated with buying property and taking out a loan and mortgage plus a lender’s legal review fee, which varies between lenders. Please note that in most cases you will not need to incur any of these costs prior to SMSF Loans gaining an indicative approval for you.
No. None of our lenders require LMI.
Yes. In fact we recommend it. Pre-approvals are indicative only and will be subject to a valuation report on the property being acceptable to the chosen lender.
Most residential investment property and most income producing commercial properties including some rural properties.
No. Only if it was income-producing rural land.
Developments – no. Construction – no, but this does not preclude “off the plan” purchases so long as a completed dwelling is settled upon. Two-part land and construction contracts are not acceptable for this style of loan as the land is settled on and then ‘improved’ which is a breach of the SIS Act.
No, however business real property that is held outside your SMSF can be purchased by your SMSF using a SMSF loan.
Yes, as long as the original loan met the requirements of the SIS Act. You cannot leverage any equity as part of a refinance; however you can borrow to refinance an existing loan amount plus costs of the refinance.
Outgoings – management fees, maintenance, rates and other costs associated with property ownership are the responsibility of the SMSF. All rent received belongs to the SMSF.
The property can be negatively geared inside the SMSF. Normal superannuation contributions into your SMSF can be used to offset any shortfall between rent received and loan payments and outgoings. Any voluntary contributions you make may receive preferential tax treatment (speak to your adviser about this).
You do. While there are companies seeking to ‘bundle’ property and SMSF loans – we do not endorse or represent any organisations that do this. The whole point of having a SMSF is to take more control of your own long term financial and retirement planning.
Yes – in the usual way. They cannot be a related entity or person for a residential property, but can be for commercial or rural properties.
Yes. We do not recommend lenders that insist on you using their nominated Property Management.
Yes. Your chosen solicitor or conveyancer acts for you on the purchase of your property.
If you already have an Accountant or Financial Planner who is conversant with SMSF structures you should continue to use them. If you are not yet working with an adviser you will need one in order to meet lender requirements.
Yes – this is our area of specialisation. InShape Home Loans will liaise with your Accountant, Financial Planner or Property Specialist on your behalf.
Yes, however if your advisers regularly do this sort of work then your adviser will probably arrange this for you. Otherwise some of our lenders offer a service to you or your adviser to facilitate the establishment of your SMSF Trust and/or Bare Trust structures. Contact us for more information.
You will need a minimum of 20% (residential), or 30% (commercial) of the purchase price of the property plus enough to cover the costs of structuring the lending transaction and normal costs associated with property purchase. Depending on your investment strategy or lender requirements you may also need an amount left over in the SMSF (or invested from the SMSF in other asset classes). If you are planning to use a majority of your SMSF assets toward the property purchase, anticipate a lower LVR.
Yes – you can roll-over existing superannuation money and/or make a voluntary lump sum contribution in order to ensure sufficient funds for the property purchase. You should seek advice on how much voluntary contribution you can make and still receive preferential tax treatment.
That was correct until changes in the law in September 2007. It is still true unless very specific conditions are met and special structures are used – as outlined elsewhere in this guide. The basic rules are:
• The money must be used to acquire an asset that the SMSF is not otherwise prohibited from buying
• The asset must be held on trust for the SMSF while mortgaged
• The SMSF must acquire a beneficial interest in the asset from the outset
• The SMSF must have the right to acquire legal title by making one or more payments
• The rights of the lender, and any other party, (to recover borrowings from the SMSF) must be limited in recourse to the security property
This information is provided as a general guide only and is not advice or a recommendation to enter into any transaction, and is subject to the normal lending guidelines. This information has been obtained from sources that we believe to be reliable and we makes no representations as to, and accept no responsibility or liability for, the accuracy or completeness of the information. InShape Home Loans and its affiliates do not purport to be legal, tax, accounting, financial or regulatory advisors in any jurisdiction. InShape Home Loans acts neither as an adviser to, nor owes any fiduciary duty to, any recipient of this information. Prior to entering into any proposed transaction, the recipient should independently evaluate the risks of such a transaction and the recipient’s ability to assume such risks from their adviser.