Buying a Property in Your Self Managed Super Fund

To take out a loan in your Superannuation fund your fund must be self managed. You can buy an investment property and your Super fund will be the owner. You are not, however, allowed to buy your family home or primary residence through your Super fund. The banks are usually prepared to lend up to 80 per cent of the value of a residential property and 65-70 per cent of a commercial property.

Who pays off the loan you may ask? The contributions to your super fund in addition to the rent you receive from tenants is what repays the loan. If you are self employed, your business can be the tenant of a commercial property owned by your superfund. In other words you are your own land lord. This is because your Superfund is designed to ultimately provide for your retirement, so the repayments must be from an income producing source, that is your business not your personal funds.

It is imperative to structure investments in your Super fund in the most suitable way for your future. You must seek advice from your accountant or financial planner before purchasing such a property.