SMSF Borrowing Package
The ability to now be able to borrow money through a limited recourse borrowing arrangement to buy a residential or commercial property in your SMSF presents an exciting new opportunity.
A limited recourse borrowing arrangement requires an SMSF trustee to take out a loan from a third party lender. The trustee then uses the loaned funds to purchase a single asset (or collection of identical assets that have the same market value) to be held in a separate trust.
Any investment returns earned from the asset go to the SMSF trustee.
If the loan defaults, the lender’s rights are limited to the asset held in the separate trust. This means there is no recourse to the other assets held in the SMSF.
When financing your loan for the purpose of your SMSF property, there are number of strict conditions you must comply with.
Self Managed Retirement Systems take the headache and stress out of SMSF borrowing and work with you to help ensure you meet your compliance requirements the first time to avoid timely and costly errors when purchasing your investment property.
We assist fund trustees with:
- Review and amendment of fund investment strategy where required
- Review of your current SMSF trust deed (where applicable)
- Minutes and trustee resolution
- Establishment of Holding Trust
- Establishment of new corporate trustee for Holding Trust (if required)
- Processing and relationship management with third parties
- Technical Support
- Subsequent bare trusts to accommodate acquisition of ancillary car park/s, storage cage etc. where separate titles involved
- Loan agreement (if required)
As an Authorised Representative of Core Financial Services, we are not authorised to provide the following services:
- Legal or taxation advice
- Draft or amend an SMSF trust deed
- Provide administration services for the daily operation of an SMSF (these should be provided by an accountant or administration service). We can however facilitate the arrangement of these services
- Conduct financial and compliance audits on the SMSF
- Provide actuarial certificates or valuations for defined benefit funds
- Hold a Power of Attorney on a client’s account.