When applying for a self-managed super fund (SMSF) loan, it is important to provide the necessary documents to ensure that the loan application is smooth and goes without any hiccups.
While different lenders could have their unique requirements around SMSF documentation, they remain obliged by the Superannuation Industry (Supervision) Act 1993, commonly known as the SIS Act.
In alignment with the SIS Act, all lenders require specific information to assess your SMSF’s eligibility and evaluate the loan application.
Let’s explore the essential documents you’ll need:
1. SMSF Trust Deed:
The trust deed outlines the rules and regulations governing your SMSF. Lenders want a copy of the trust deed to verify compliance.
2. Custodian Trust Deed:
If you’re using a limited recourse borrowing arrangement (LRBA), a custodian trust holds the property title until the loan is repaid. The custodian trust deed (or also known as a Bare Trust) is essential for property purchases within an SMSF.
3. Contract of Sale:
You will need to provide the contract of sale for the property you intend to purchase.
This document confirms the terms and conditions of the property transaction.
4. Proof of Adequate Personal Income:
For PAYG income earner, lenders typically scrutinise your PAYG payslips and the Superannuation Guarantee Contribution (SGC). It’s important to note that various lenders have distinct policies regarding voluntary contributions beyond the Superannuation Guarantee Contribution (SGC).
For self-employed customers, lenders commonly assess the last 24 months of Super contributions.
The borrowing capacity varies based on lender policies. To determine the precise amount you can borrow for your SMSF investment property purchase, please reach out to our team.
5. SMSF Bank Statements:
Compile recent SMSF bank statements to demonstrate financial stability and contributions to the SMSF fund. These statements help lenders assess your fund’s liquidity and also your ability to service the SMSF mortgage.
6. Tax Returns and Audit Certifications:
You will also need to provide the SMSF’s financial statements, tax returns, and audit reports.
These documents verify the fund’s financial health.
7. Rental Estimates (if applicable):
If you’re purchasing an investment property, include rental income estimates if the property is vacant or untenanted. Lenders consider rental income to assess if you are able to service the loan.
Remember that SMSF loans are subject to the sole purpose test, which ensures that the property acquisition aligns with retirement income goals.
At Fairlane Finance, we recognise the pivotal roles played by financial planners, accountants, and lawyers in providing informed advice related to Self-Managed Superannuation Funds (SMSF). Our team collaborates with these professionals to compile accurate and complete documentation for a successful SMSF loan application.
If you are new to SMSF, our team is ready to guide you through the entire process, from establishing your SMSF to strategically acquiring an investment property.
Talk to us today.
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