Prior to September 2007, self-managed superannuation funds (SMSFs) in Australia were not permitted to borrow funds in order to buy property. The law has been changed to allow SMSFs to borrow in order to acquire property, so long as it is done via a instalment warrant. As well as the ability to leverage into direct property, the new borrowing rules do offer attractive tax benefits. However, they are not without their risks, including making sure that the SMSF is able to generate sufficient cash flow in order to meet the loan's interest repayments.
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