An Introduction to the SMSF Loan Scheme
The SMSF is an abbreviation of 'Self-managed Super Funds'. SMSF home loan is a type of loan that is used to buy investment property.
The SMSF is an abbreviation of 'Self-managed Super Funds'. SMSF home loan is a type of loan that is used to buy investment property. The returns on investment- whether that's rental income or capital gains, are funneled back into the super fund which in turn, increases the retirement savings of the borrower.Who can borrow the SMSF loan?
The SMSF loans are used to buy both residential or commercial property. The Australian Taxation Office (ATO) controls this type of loan and allows membership of up to four people where all members should be trustees. The SMSF member and trustees borrow this loan with an intent of making an investment that can help grow the members' retirement savings.What are the advantages of investing in SMSF loan?
The SMSF Home loans are considered a good home loan option as well as the best powerful way of saving for retirement. This is because it provides the borrowers with several useful advantages. Some of these advantages are listed below:
While there are some important benefits of SMSF commercial property loan, there are also a few drawbacks of this loan, about which every member of the SMSF should be aware of. These drawbacks include:
No tax loss offsets: Under the SMSF loan scheme, any tax losses from the member's commercial property can't be offset against their personal income tax. The member must rent his/her property at the market rate. Simply put, this means that if the member owns the property and lease it to his own business, then he can't apply any discounts to the rental price.
There are certain essential rules which the borrowers must follow while applying to SMSF home loans in Australia. These rules state that the property for which the loan is taken must:
Lenders and all other types of financial institutions offering SMSF home loans in Australia look for the following requirements in their borrowers while lending the loan:
Applying to a SMSF home loan can be quite a tricky and lengthy process. That is why, it is best to take help from a home loan broker while applying to the SMSF loan.
Your Finance Adviser is a leading group of best home loan brokers in Australia. We are a finance advising company that works with a team of home loan experts including first time buyer mortgage brokers who specialize in providing a variety of home loan advice to a variety of customers located across all types of industries in Australia.
Shailendra Wadhwa, our passionate and committed home loan broker of the Kellyville Ridge , is ready to assist the customers in making the right financial decisions while applying to a home loan in Australia.
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Director and founder of Your Finance Adviser, I have over 12 years of experience in mortgage broking.