Superannuation Borrowing

In the past, Self Managed Superannuation Funds (SMSFs) were unable to borrow money for the purpose of purchasing investments such as shares or property. However, superannuation laws were amended in 2007 to allow SMSFs to borrow money in order to purchase any investment asset provided strict rules are complied with.

Currently, a SMSF is able to borrow money to buy any type of asset permitted by the relevant superannuation legislation. This includes shares and both residential and commercial property. Although the rules do not restrict the type of asset that a SMSF can acquire, superannuation borrowing rules, often referred to as "limited recourse borrowing arrangements" have meant most SMSFs have borrowed money to purchase property.

Purchasing an asset such as residential or commercial property using a limited recourse borrowing arrangement is becoming quite popular. If you would like to use your SMSF to acquire an asset, please contact our office and speak to any number of our solicitors who have dealt with this purchasing structure.