buy property overseas with SMSF

10000,

What the SIS act requires is that a SMSF buying property needs to set up a bare trust to buy it in. The trustee of the bare trust can mortgage that property and only that property. The trustee of the bare trust is acting for the SMSF trustee and is just the legal owner of the property temporarily while there is a mortgage on it.

So if you could work out a situation in a foreign country where a bare trust can be established and find a lender willing to lend to this trustee on the basis that they are the legal owner for someone else and then that may meet the guidelines in the SIS Act. Many hurdles to overcome though. Deposit has to be paid for by the SMSF etc.

No Australian lender is going to lend for overseas properties with the loan secured on those properties. This is even more the case if there will be a SMSF involved.

Hi Guys,

Am pretty new to property investing and know very little about the how SMSFs work, but going through the thread i understand that the biggest hurdle is that no lender overseas would be willing to lend based on the regulatory requirements in Australia. My question then is what if there is no lending involved or if the lending requirements are fulfilled by a private loan from say a family member. I am in a similar situation and would like to setup a SMSF to invest in India. I have 2 options either pool funds with my Dad or to use my own money, which i must add would mean over 90% of my currently SF balance.

Any thoughts on whether this would work?

regards

Jai

I have just done one of these for a client, in Australia.

plenty of equity

lease in place

bare thrust

etc etc

and it is painful, even with everything going okay

all the people who are saying NO here are the ones who genuinely help people here, everyone else on this thread is just talking about things they know nothing about

No, not possible, negative, how many ways do you need it spelt

you may be able to, without telling people what you are really doing get it done, or through some bank offshore, who does not even know what SIS or SMSF is, get the loan BUT good luck in getting a clean audit

Hi Jaideep.

Sorry I though you must have been Thai because "Jai Dee" in Thai means kind hearted so I thought your user name was trying to say you were a kind hearted property manager (pm).

It could be possible with careful planning. All the normal rules will apply.
One problem will be the bank account.
Another issue will be doing the tax returns.