Borrowing through your self-managed super fund
Self-managed super fund lending made easy
At Vanquish Finance Group, we’re strategically positioned to help you secure finance through your Self-Managed Super Fund (SMSF). We have direct access to lenders offering Self-Managed Super Fund loans, including major banks and private non-bank lenders.
Why self-managed super fund lending exists
Legislative changes to the Superannuation Industry Supervision Act (SIS Act) in 2007 made it possible for SMSFs to borrow funds to purchase certain types of real estate—whether residential, commercial, retail, rural, or specialised properties. However, strict structures must be followed, making SMSF lending complex.
Why Self-Managed Super Fund Lending Exists
Legislative changes to the Superannuation Industry Supervision Act (SIS Act) in 2007 made it possible for SMSFs to borrow funds to purchase certain types of real estate—whether residential, commercial, retail, rural, or specialised properties. However, strict structures must be followed, making SMSF lending complex.
How it works
- A security trustee purchases the property on behalf of the SMSF and holds it in trust.
- The SMSF contributes equity from its assets and borrows the balance.
- The loan is a limited recourse loan, meaning the lender’s rights are limited to the property held as security.
General features
- Residential property: Up to 80% LVR, 30-year terms, 100% offset facility.
- Commercial property: Up to 80% LVR, 30-year terms.
- Rural property: Up to 65% LVR, 20-year terms.
- Interest-only options available.
Restrictions
- No construction or refurbishment loans.
- Members cannot live in the property while in the SMSF.
- No vacant land (except income-producing rural land).
- No redraw facility.
- Stand-alone purchases only.
- Refinancing allowed if SIS Act requirements are met.
Key benefits
- Maximum 15% tax on rental income.
- Interest and expenses may be tax-deductible.
- Potentially no CGT if sold in pension phase.
- Greater investment control and flexibility.
- Limited recourse protects other SMSF assets.
- Providing the SMSF income is sufficient to service the debt then any liabilities held in your individual names can be excluded from the assessment.
Risks and responsibilities
For more information on the risks and responsibilities of managing a Self-Managed Super Fund click here to go to the Australian Governments Money Smart website.
You may also be interested in reading our blog on Self-Managed Super Fund Lending. For more information
