Hi All
I was hoping that someone maybe able to assist me.
My wife and I currently have approx 500K invested in our SMSF (ie. in shares & term deposits).
However we are looking to purchase a property which will be in the vinicitiy of 250K – 280K.
However we are not looking to borrow any monies to fund the purchase but will be buying the property outright (ie. using the monies within the SMSF).
Therefore I was wondering what name should be on the "contract of sale"
Look forward to your reply
Duck if Personal Trustees are involved then the Contract should read Mr & Mrs Smith ATF Smith SMSF Super Fund.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Think very carefully about this. a SMSF can only borrow to acquire an asset. So once it is purchased there can be no release of equity or setting up a LOC etc.
You may want to consider getting an IO loan with a 100% offset account at 80% LVR. Park the cash in the offset account and pay no interest but still have the cash available if need be.
Also, property is generally only a good investment if it is leveraged.
For the contracts, best to seek legal advice – also seek legal advice about the trustee set up. I would recommend you avoid using personal trustees – if one of you were to die there is a lot of mucking around to change the title deeds – it could ruin your day.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
If you don't want to go to expense of a SMSF Bank Loan and various Bank Solicitors Deed perusal fees etc you could always look at a Related Party loan which would be a lot cheaper to set up.
As Terry mentioned you cannot use the asset as security after settlement to raise funds or use as collateral security so make sure you get it right first time.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Actually, if paying cash you may want to consider setting up a fixed unit trust to own the property and the SMSF to own the units. This may introduce some flexibility later….
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
You must be logged in to reply to this topic. If you don't have an account, you can register here.
