How to beef up Limitd recourse loan ?

Using SMSF borrowing money to buy property, Bank can only use the newly purchased property as security for this loan. This limits the loan size a lot because they have only 1 security for the loan. Can bank use the newly purchased property PLUS a property OUTSIDE of superfund as security so that we can borrow up to, say, 105% of the new property value ?

 

no.

 

One option that you could consider - subject to getting the right financial, legal and tax advice - get an equity release loan on the property outside the SMSF and then inject that cash into the SMSF as a non-concessional contribution. This would probably only make sense if you were at risk of defaulting as I don't think the interest that would payable outside the SMSF would be personally deductible.

 

You/related party could potentially lend the fund the deposit, but you would probably be unlikely to find a lender willing to lend on this basis.

Another option is for a related party to lend 100% of the purchase price and then refinance this loan with a bank down the track after the property has grown in value.

 

No it wouldn't be deductible to the member.