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SMSF Borrowing Example

 

A written example of SMSF Gearing can be seen below. (Note: this is a guide only).  Please see your Financial Adviser for your specific needs and requirements. Birchcorp can provide you with financial advice relating to your personal circumstances. Birchcorp can also organise the associated super loan with an appropriate lender. Enquire Here

 

                   EXAMPLE OF SUPERANNUATION BORROWING

Purchase Price

350,000

Stamp Duty

11,240

Legal Fees (Banks: To vet the deeds) Nil cost for an internal loan: Birchcorp prefers an internal loan where possible.

2,000

Structure Set Up: Deeds (SoA, SMSF and Bare Trust with Corporate Trustees- $4994), Birchcorp Fees $3500, Application of loan $1500, and Conveyancer/Solicitor $1000 (as in a standard purchase). Building and Pest Inspection $500

11,494

TOTAL

374,734

 

DEPOSIT REQUIRED: A SMSF must have funds available: A maximum of four people may help achieve this balance.

 

SMSF Deposit (LVR – 72%)

98,000

Stamp Duty

11,240

Legal’s

2,000

Structure Set Up

11,494

TOTAL

122,734

 

CASH EXPENSE

 

Agents Commission 6.6%

1,132

Strata Fees @ $300 Per Qtr

1,200

Council Rates @ $300 Per Qtr

1,200

Water Rates @ $200 Per Qtr

800

Maintenance

1,000

TOTAL

5,332

 

 

NON CASH EXPENSE

$25,000 Depreciation @ 15%

3750

$200k Building Allowance @2.5%

5000

TOTAL

8,750

 

NET POSITION

Non Cash + Cash Expense

(14,082)

Rental Return @ $350pw

18,200

Interest @ 7.0% on $252,000

(17,640)

NET LOSS

13,522

 

 OUTLOOK

CASH EXPENSE

(4,772)

Contributions Required if on a $70,000p.a. combined income of super fund: SGC = $6300 :

 

6,300- 4,772 = Surplus of $1528 p.a.

 

Nil Contributions Required and due to the Non cash deductions: The SMSF would also have a tax credit of $2,028

 

Please note: The table above is one example for Super Borrowing via an external lender. There are many strategies that are more cost effective and may be utilised to improve the LVR and allow you to participate in superannuation borrowing. Please ask Birchcorp how this may be achieved.

 


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Birchcorp Pty Ltd ABN 56 132 775 654 is a Corporate Authorised Representative (No. 339299)
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