Self-managed super fund (SMSF) administrator Esuperfund has launched a loan service that allows clients to borrow through SMSFs to purchase residential properties.
SMSFs previously needed to have the entire value of a property in cash upfront in order to invest in residential property, pricing many SMSF investors out of the market, until a recent change in the laws to allow borrowing for this purpose.
SMSFs can now borrow up to 72 per cent of the residential property's value through Esuperfund's preferred lender, St George Bank, under the property loan service.
In order for SMSFs to borrow to acquire residential property they must establish a security custodian trust structure or instalment warrant bare trust structure, according to Esuperfund.
Through the loan service, Esuperfund organises the setup structures and documentation for SMSFs at no charge, and no additional accounting or compliance fees are payable, according to Esuperfund chief executive Bill Nicholas.
"Our annual fee remains fixed at $699 per annum, which is unprecedented in the marketplace, [which] will charge additional fees upwards of $2,000 for SMSFs [that] invest in residential property, particularly with borrowings," Nicholas said.
