Superannuation funds can now borrow money to purchase real estate. An investor can have just as much choice and control over investment properties inside as outside a superannuation fund. The Superannuation Industry Supervision Act (SIS ACT) was amended in September 2007 to allow self managed super funds (SMSF) to borrow to purchase real estate so long as a special structure is used. As a result of these changes, Iden Money is now able to offer specific products that cater to this market.

Under the amended SIS Act, a SMSF may borrow provided:

• Borrowed funds are used to purchase an asset
• The asset is held in trust for the SMSF by another entity, ie. property trustee
• The SMSF must have the right to acquire legal ownership by making payments
• The lender’s recourse against the SMSF must be limited to the underlying asset, ie. The other SMSF assets must be protected
• The SMSF must comply with all regulations applying to superannuation funds
• The SMSF must ensure that the level of investment in real property is in line with the fund’s investment strategy, including:
  
  • Diversification of assets
  • Liquidity
  • Maximising member returns in fund

Talk to Iden Money about our SMSF lending solutions.