How to Buy an Investment Property Using Your Super FIRST, SOME BACKGROUND First things first, only you’ll need a Self-Managed Super Fund (SMSF) if you want to buy and investment property with your super savings. Borrowing money can have several benefits for people with an SMSF which make it well worth considering. However, you need to be careful because there are also risks whenever you borrow money to invest as loses will be magnified. LIMITED RECOURSE BORROWING ARRANGEMENTS The Superannuation Industry (Supervision) Act generally does not permit borrowing. However, since September 2007, SMSF Trustees are permitted to borrow money to spend on specific investment assets. In July 2010, the Act was amended to clarify how this exemption works. A further clarification was issued in 2012, specifying the terms of both borrowing for repairs and improvements, and the type of assets for which the borrowed money could be used.
TYPES OF PROPERTY YOU CAN INVEST IN The types of assets which an SMSF is permitted to acquire using borrowed money must come within the allowable types of asset, under the Act, which may be acquired through direct investment. Permissible assets include:-houses, •residential units, and •commercial property THE RIGHT BORROWING STRUCTURE
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