Category: Strategies

November 13, 2010

Can you renovate a property purchased under a SMSF limited recourse loan?

Can a SMSF renovate a property that has been purchased under a limited recourse loan arrangement?
Following the changes made to the super borrowing laws that came into effect on the 7th of July 2010, one of the major items which both investors and advisers have been chasing clarification on is whether a property can be renovated when purchased under such an arrangement.

November 10, 2010

SMSF limited recourse borrowings from related parties

Utilising a loan from a related party of the SMSF instead of, or in addition to, can provide the following advantages when compared to obtaining a limited recourse loan from a bank:

Reduced upfront costs, reduced ongoing costs, flexible repayment terms, interest is paid to a related party rather than banks with multi-billion dollar profits, younger SMSF members can inject capital to purchase property without it being trapped until they retire, high value assets can be transferred to a SMSF without exceeding the contribution caps and tax deductible contributions can be spread over a number of years and the ability to correctly and legally develop property within a SMSF using borrowings.

October 30, 2010

ATO provides further guidance on SMSF borrowing rules

The ATO has recently released a series of interpretative decisions about SMSFs using limited recourse loans to acquire investments such as residential and commercial investment properties.

This article gives a brief plain English summary of what each ruling is about and the impact it has on investors looking to use their super to buy property.

September 18, 2010

Best structure for property investment – family trust or SMSF?

For many years the family trust has been the preferred investment vehicle for people looking to build wealth through property – and rightly so. However, with self managed super funds now able to borrow to invest in property via limited recourse loans, every property investor who currently has a family trust or who may be considering one needs to take another look at what is the most appropriate structure for their situation.