SMSF LOANS
Stop leaving your retirement to chance. Put your super to work in property.
For many Australians, superannuation is a “black box”, something that grows slowly in the background, managed by someone you’ve never met. But it doesn’t have to be that way. A Self-Managed Super Fund (SMSF) gives you the steering wheel, allowing you to use your retirement savings to invest in the asset class Australians know best: property. At VaultFin, we specialise in the technical side of SMSF lending, helping you navigate the strict regulations so you can build a legacy that lasts.
Why SMSF LOANS?
SMSF lending is one of the most powerful wealth-creation tools available. But, it’s also one of the most misunderstood.
SMSF Basics Technically known as a Limited Recourse Borrowing Arrangement (LRBA), an SMSF loan allows your fund to borrow money to purchase a single asset, such as a residential or commercial property. The property is held in a separate “Bare Trust” until the loan is paid off. The rent collected from the property, combined with your ongoing employer super contributions, goes directly toward paying down the debt. Because it is “limited recourse,” the lender cannot touch the other assets in your super fund if things go wrong, they only have a claim on the property itself.
Residential & Commercial Options The flexibility of SMSF lending is a major drawcard. You can purchase a residential investment property to diversify your retirement portfolio. Alternatively, many business owners use their SMSF to buy their own commercial premises. Your business then pays rent to your super fund at market rates. This is a brilliant way to turn a standard business expense (rent) into a long-term retirement asset.
Compliance Considerations The ATO has very strict “arms-length” rules. You cannot live in a residential property owned by your SMSF, and you cannot rent it to family members. There are also specific rules about how you can renovate or improve the property while there is a loan attached to it. At VaultFin, we work alongside your accountant and financial advisor to ensure the trust deeds, the Bare Trust, and the loan documents are 100% compliant so you never fall foul of the auditor.
Why Use an SMSF for Property
Accelerated Wealth Building
By using your existing super balance as a deposit and leveraging with a loan, you are effectively “supercharging” your investment. Instead of earning returns on just your saved balance, you are now capturing the potential capital growth of an entire property.
Ultimate Control
You decide which property to buy, which suburb to invest in, and how the asset is managed. You are no longer at the mercy of a corporate fund’s performance or their high management fees.
Significant Tax Benefits
Superannuation is a low-tax environment. Rental income inside an SMSF is generally taxed at just 15%. Even better, if you hold the property until you move into the “pension phase” of retirement, the property can often be sold with zero capital gains tax. That is a massive difference compared to selling a property held in your personal name.
How We Help
Specialist Lender Access While the big banks have stepped back, a wide range of second-tier and specialist lenders have stepped up. We have deep relationships with lenders who have a high appetite for SMSF loans. We know which ones offer the best terms for residential vs. commercial property and which ones have the most favorable “liquidity” requirements.
Documentation & Legal Support The paperwork for an SMSF loan is significantly more complex than a standard home loan. We guide you through the requirements for the SMSF Trust Deed, the setup of the Corporate Trustee, and the creation of the Bare Trust. We coordinate with the lender’s legal team to make sure every document is signed in the correct order, preventing the costly delays that often plague these types of applications.
Strategic Structuring Advice We look at the “big picture” of your fund. We help you determine the optimal loan-to-value ratio (LVR) to ensure your fund remains diversified and has enough cash flow to cover expenses like rates, insurance, and maintenance. Our goal is to ensure that your SMSF isn’t just “buying a property,” but is functioning as a healthy, sustainable retirement vehicle.
Stop letting your super sit idle.
The difference between a “standard” super fund and a strategically managed SMSF can be worth hundreds of thousands of dollars by the time you retire. If you’re ready to stop being a passive observer and start being an active investor, let’s talk.