Self Managed Super Funds
Self managed super fund loans
Self-managed superannuation funds (SMSF) provide the opportunity to take control of your super, providing the choice and flexibility allowing you to borrow to invest in direct real estate with SMSF Loans. Changes in superannuation laws have allowed SMSFs to borrow money to purchase residential or commercial property. This strategy has been popular with small business owners and now is attractive for mum and dad investors looking to enter the property market and secure their retirement future by investing in property. SMSF property is arguably the best tax incentive with a concessional tax rate of 15% in accumulation phase and no tax in pension phase. As always, get the advice of your accountant or financial planner if considering this investment strategy.
How MediPro Can Help You
What you need to know
- Insufficient funds in your SMSF to buy the property outright
- Reduce the cash flow commitment of your fund
- Borrowing can asset to diversify your SMSF Investment Portfolio
- Tax deduction for loan repayments
- SAVE TAX – you can hold a property until pension age and pay no tax on capital growth
With many first home buyers priced out of the residential property, many investors are using their superannuation as an opportunity to enter Australia’s heated property market, with a buy now and hold strategy.
SMSF loans can benefit diversification by borrowing up to 80% of value of a residential property and 70% of the value of a commercial property. Remaining funds can be used to save $$$ or further diversify your investment portfolio.
For SMSFs looking to purchase an investment property, most lenders will restrict your loan to:
- 80% of the property value for residential property
- 70% of the property value for commercial property
Product features will differ between lenders, a MediPro Specialist will assist you to choose the most suitable lender. Don’t underestimate the power of an offset account, which will save on interest payments during the life of the loan.
- Contact MediPro Capital Finance to determine your borrowing power.
- SMSF invests in property, then appoints a property trustee to purchase the property on its behalf.
- Your MediPro Specialist will recommend a SMSF Loan to meet your needs.
- MediPro has access to ALL SMSF lenders, we will choose the right loan for you.
MediPro Capital Finance will guide you through the SMSF Loans process from SMSF Set-up to settlement to ensure there are no surprises. After all – SMSFs are supposed to be fun. Our comprehensive checklist describes the steps taken to ensure a smooth SMSF Loan process.
MediPro Capital Finance have access to all SMSF lenders to recommend the best product to meet your needs. Remember it’s not just about the lowest rates, also the product features such as an offset account. So, before you choose a loan, let’s review the features and the fine print to suit your needs.
What Property Can I Buy
You can buy a house to tenant or a commercial property for your business. There are certain rules and requirements which we can discuss with you. In many ways applying for a SMSF Loan is similar to a standard home loan however there are also many differences. If you’re unsure if a SMSF Loan is right for you call us on 1300 937 007 to discuss your options.
Let’s say an SMSF has $100,000 in savings and you would like to purchase a $350,000 SMSF property. Prior to purchasing SMSF property – contact a MediPro Specialist to obtain a pre-approval with a suitable lender. Once pre-approved at 80% loan to value ratio (“LVR”) or $280,000 using a limited recourse loan. You will find a SMSF property and sign a contract of sale. The deposit of 10% or $35,000 is paid from your SMSF.
A valuation is conducted and the loan is then formally approved. Settlement is arranged and the costs to complete are paid from the SMSF including Stamp Duty, SMSF Loan application fees and legal fees. Remember SMSF Loans can be over a 30 year loan term, during this time your property will hopefully appreciate and your rent will cover your repayments.