Free SMSF Property Gearing Checklist
Buying a property with your self managed super fund?
Use this handy checklist to help you when looking to buy investment property with your self managed superannuation fund (SMSF).
The Investors Checklist for SMSF Property Investment:
□ Has a “custodian” (holding) trust been set up to hold the new asset until it is no longer required as security
□ Is the asset purchased of the type permitted to be purchased by SMSFs ie not domestic rental properties from members or not in breach of the in house asset rules. See the guide on SMSF Property Rules here.
□ Is the purchase within the scope of the investment strategy or do you have a qualifed SMSF adviser or accountant looking after this?
□ Does the SMSF trust deed allow for limited recourse borrowing
□ Is the sole motive of entering into the transaction to provide for the retirement of the SMSF members.
□ Is there a loan pre-approval in place or has the lender confirmed how much the SMSF can borrow?
□ Does the lender of the funds have access to any of the superfund’s other assets, in the event of default the lender can only take the asset held in the holding trust.
□ Is it a member loan, if the lender is a member, the funds must be lent to the SMSF at market rates.
□ Have personal guarantees been given to the bank? If so the member must sign an agreement that should the SMSF default they will not attempt to recover their out of pockets expenses or losses from the SMSF.
Free Guide on Buying Property with Super