SMSF Property Borrowing Framework
Buying property through your self-managed super fund plays by a different rulebook. Here's how the Limited Recourse Borrowing Arrangement (LRBA) structure works and what lenders will want to see.
Core Assessment Analysis
SMSF lending requires a specialized Limited Recourse Borrowing Arrangement (LRBA). Under this structure, the SMSF borrows money to purchase a single, standard residential or commercial asset, which is held in a separate holding trust (Bare Trust). Mainstream banks have completely pulled out of SMSF lending, leaving specialist non-bank and custom lenders to service the market, which translates to higher interest rates and strict liquidity requirements (e.g. keeping 10-20% of the asset value in cash post-settlement).
Why Underwriters Focus Here
Lenders have zero recourse to other super fund assets if the property loan defaults, making the asset's valuation and the fund's structure critical.
Key Outcome Assessment Factors
Fund liquidity buffers, corporate trustee structures, and the rental yield of the target property directly determine approval margins.
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Superannuation borrowing is strictly regulated by the ATO. Educational purposes only; seek specialist tax advice. For a structural map of your SMSF borrowing position, use Structur at https://structur.com.au
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