Borrowing in SMSF are you running out of time?

Did you know that you can borrow in your super fund to invest in property?

Borrowing in SMSF has become very popular of late and has given trustees of SMSF the ability to invest in direct property which otherwise could not access.

Some of the advantages of borrowing in Super:

– Pay debt down faster
– Reduced cash flow commitment
– Increase the assets of the SMSF without contributions
– Concessional tax treatment 15%
– If held to preservation age any capital gains and income will be tax free under current legislation

However there are some associated costs and risks with borrowing in super.

– Interest rates usually not discounted in SMSF
– The amount of deposit required to acquire is higher
– Gearing risk
– Strict superannuation rules affecting property ownership
– Documentation requirements are very strictly controlled
– Borrowing is not suitable for everyone

Personal circumstances differ for each individual so if you are interested in borrowing in your self managed superfund please contact us for a consultation so we can advise whether this is an appropriate option for you and your superannuation fund.

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