As has been well publicised, the future of superannuation borrowing for property purchases (residential and commercial) has been a subject of debate ever since David Murray’s Financial System Inquiry Report recommended a ban on limited recourse borrowing arrangements (LRBAs).
The government has been considering this recommendation, although no formal announcement has been made. The release of the Federal Budget last month had seemed a likely opportunity to announce any changes, however Budget Night has come and gone and still no announcement has been made. Accordingly the laws governing LRBAs remain unchanged… for now. Assistant Treasurer, Josh Frydenberg, has indicated the government is looking closely at this area, including the question of personal guarantees. Just as importantly the banks are looking at their own operations with several major lenders recently either limiting their participation or quietly exiting the field altogether.
This means you can still leverage to buy property in your SMSF, but it is now more important than ever to get advice at an early stage. Given the above, it is particularly important to have an in depth conversation with your advisor and bank/broker at the earliest opportunity to confirm that your lender is on board and won’t decline the loan application in the weeks before settlement.
If you have thoughts of using your superannuation balance to put towards your next property purchase you might want to consider this sooner than later.
If you have any queries on buying property within super, contact Rob Hand, Financial Advisor, at Partners Wealth Group on 1800 333 143. Partners Wealth Group is one of Australia’s leading business and financial advisory groups which specialise in retirement planning, investment advice, superannuation, finance lending and legal services. Visit partnerswealthgroup.com.au
Author: Rob Hand
Company: Partners Wealth Group
Phone number: 1800 333 143