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commercial property in super

Discussion in 'Superannuation, SMSF & Personal Insurance' started by frankie, 8th Jul, 2008.

  1. frankie

    frankie Member

    Joined:
    14th Oct, 2007
    Posts:
    9
    Location:
    sydney
    Further to my last post, we want to join my parents superfund, this will give us total cash of 300K. We want to buy a commercial prop 600K. Looked into borrowing through super, lots of extra fees, interest (11%) and paperwork.

    Can we simply extend our current loan by 300K (if bank allows) and on lend this to superfund at exactly same rate (home loan rates) ie super pays the interest. The rent earned by premise (partly from us) then goes to pay interest and principle. Our super contributions also go to paydown loan.

    Is this ok?

    Is there any special paperwork required?

    Who can provide advice in this specialised area?

    Thanks
     
  2. AsxBroker

    AsxBroker Well-Known Member

    Joined:
    8th Sep, 2007
    Posts:
    1,448
    Location:
    Sydney, NSW
    Hi Frankie,

    You'll want to talk to a SMSF specialist.

    Cheers,

    Dan

    PS Before making an investment decision speak to an FPA registered Financial Planner.
     
  3. NickM

    NickM Co-founder Staff Member

    Joined:
    20th Jun, 2005
    Posts:
    321
    Location:
    Sydney
    Hi Frankie,
    you would still need a bare trust & the associated docs.
    Also recommended that the interest charged from the individuals to the smsf be at a slightly higher rate otherwise why would you do it.

    We just did one and worked well. We didnt need to use the smsf property as security so bank finance was easy as client had sufficient security outside super to provide the loan
    Cheers
    Nickm