The popularity of borrowing through SMSFs has been growing over the last few years. If you plan to do this, you need to understand what a Limited Recourse Borrowing Arrangement entails.

Under the right circumstances, borrowing to invest can be a great way to boost your retirement savings or gain exposure to property that the SMSF would not otherwise have the opportunity to do so.

Although there are many benefits to such a strategy, there are also many pitfalls. Given the complexity of the arrangements and the number of parties that need to be involved, we recommend you speak to us before considering this option.

The LRBA process entails:

  1. establishment of the SMSF (if required)
  2. ensuring finance can be arranged and approved
  3. establish a secondary structure including a Bare Trust
  4. sign contract on the property
  5. finalise finance for settlement
  6. obtain sign off on transaction by licenced financial adviser
  7. settle property purchase

To find out more, call us on (07) 5557 8700!

Financial Planning services provided as an Authorised Representative of Count Financial Limited, AFSL 227232.

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