Millinium's SMSF Property Solutions - Background
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Background
Until recently, restrictions would not allow Self Managed Super Funds (“SMSF”) to borrow to purchase real estate in Australia.
In September 2007, an amendment was made to the Superannuation Industry (Supervision) Act 1993 (“SIS Act”) to allow superannuation funds to borrow to invest into direct property, subject to certain conditions. Further amendments made to the SIS Act in 2010, clarify further borrowing requirements that make it even more critical to choose the right party to assist with a superannuation borrowing solution.
Millinium’s SMSF Property Solution aims to meet all the requirements of the new legislation and we will update on any future major amendments (as and when they occur).
A super fund can borrow money if:
- the money borrowed is applied for the purchase of a property.
- the rights of a lender against the SMSF are limited to the property purchased (that is recourse to the asset only).
- the SMSF complies with its governing rules and the investment is part of the SMSF’s investment strategy.
- the structure ensures the asset is held on trust so that the SMSF acquires the direct beneficial interest to the property asset; and
- the SMSF has the right to acquire legal ownership by making all repayments.
Some advantages of using Millinium’s SMSF Property Solution:
- Your SMSF can acquire a property in accordance with the SIS Act.
- Your SMSF gain entitlement to all income and expenses and capital value of the asset.
- Your SMSF can invest in direct residential and commercial property.
- Your SMSF gains the ability to access a gearing opportunity.
- This opportunity can assist with a part of an efficient estate planning strategy.
- This opportunity can assist to growth your SMSF’s assets in a tax effective manner.
- Your SMSF can obtain years end tax reporting and update on material changes.