Self-managed Super Funds can now buy direct property with borrowed funds.
In September 2007, the laws were changed so that you can borrow money to buy real estate, providing it’s borrowed through the correct structure. While before you had to have the entire amount for a property purchase in your SMSF, now you can use some funds for direct property investment, and borrow the rest through Super Alchemy.
The ability to gear a real estate investment also means that yields (i.e. rental income) will be higher, and overall risks will be lower with the added diversification.
You can choose from residential or commercial property, with different rules applying for each (commercial loans also have a lower LVR). To purchase residential real estate directly, you need to use a Bare Trust which is also organised through the Super Alchemy service.
Our “Super Alchemy” service co-ordinates the five licensed professionals required to get the outcome of gearing Superannuation to buy real estate.
One controller required.
All these professionals need to come together in harmony under one controlling entity. Our ‘alchemy’ process links the professionals performing the required simultaneous tasks.