Q&A: Can we lend to our SMSF to buy a property?

Q: We’re looking to borrow money on our SMSF to purchase a property. Can we be the lender to the SMSF as we have surplus cash?

A: Yeah, okay. Thanks for that one, Helen. Look, I haven’t had this question for quite a while. Look, it’s good to revisit this particular issue. When we look at this, the super laws specifically allow self-managed funds to use borrowings to buy an asset, to buy a single acquirable asset like property, just like you’re suggesting. And nothing within the rules sets out where that funding or where that loan can come from. In fact, you can source, you can borrow money from a bank, another commercial lender, one of the big finance companies, or you could even source the borrowing. You could even borrow money from a related party or a member of the fund. So to answer your question, yes, you could be the lender to your SMSF under a limited recourse borrowing arrangement. Some issues that I would throw in there, some issues to consider, not just to consider. Issues that you must follow.