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Don’t constrain borrowing within SMSFs
Accountancy-based group, Chan & Naylor has urged against withdrawing the ability to borrow within Self Managed Superannuation Funds (SMSFs).
In a statement issued today, Chan & Naylor managing director, Ken Raiss expressed concern at suggestions within the interim report of the Financial Systems Inquiry (FSI) that tighter controls should be applied to borrowing within super.
"Scrutinising and potentially taking away the opportunity to borrow within a self-managed super fund structure, as potentially suggested in the interim report, will limit the opportunity for more Australians to purchase an asset that will grow in value over the long term and help pay for a comfortable and independent retirement," he said.
Raiss pointed out that most super property investment was within the commercial sector and that only between one per cent and three per cent of SMSFs held residential property debt.
"Nonetheless, thanks to the laws of compound interest the fund holders that have chosen to borrow within their super can still benefit over the long term," he said.
"Albert Einstein once referred to compound interest as the eighth wonder of the world and for this reason Australian SMSF holders should continue to be allowed to leverage assets as part of a prudent long-term investment strategy," Raiss said.
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