SMSF Lending

Self-Managed Super Fund (SMSF) lending, also known as Limited Recourse Borrowing Arrangements (LRBAs), enables SMSF buyers to acquire assets they otherwise couldn’t purchase outright.

The ‘limited recourse’ aspect means that if the SMSF defaults on the loan, the lender’s rights are restricted to the asset held in the borrowing arrangement, protecting the other assets of the super fund.

The type of property an SMSF can invest in is regulated by the ATO. Typically, residential properties must not be acquired from related parties of the SMSF members and cannot be lived in or rented by members or related parties. Commercial properties have more relaxed rules regarding related-party transactions but still must meet certain criteria.

SMSF loans are structured differently from standard residential or commercial loans. The property is typically purchased through a holding trust, with the SMSF as the beneficiary. This structure ensures that the property is separate from the fund’s other assets.

If you’d like to learn more about how SMSF loans work and whether you might be able to obtain one, contact myself and the team today.