5 Different ways a Superfund can own property 1. Direct ownership The superfund can pay cash to acquire the property. 2. Custodian Trust and borrowings Superfunds cannot borrow to acquire property unless the property is legally owned by a custodian trustee while there is a loan in place. 3. Tenants in common with someone else A superfund trustee can jointly purchase the property with someone else – it could be a member or related entity. The property could not be used as security but the other non-super owner could borrow to acquire their share. It could be tenants in common in equal or unequal shares. 4. Ungeared Unit Trust The trustee of a unit trust can own the property with the SMSF trustee owning units in the unit trust. The SMSF could be the sole unit holder or it could own some of the units with other entities owning the rest. The unit trust owned property could not be mortgaged, but the non SMSF could borrow to acquire their units as long as the trust property was not used as security. 5. Geared Unit Trust The trustee of a unit trust can own the property with the SMSF owning units – as above – but for the unit trust to be able to borrow to acquire the property, and to mortgage the property, the SMSF cannot be in control of the unit trust, nor can an associate. An example could be 3 separate unrelated family SMSFs joining forces and establishing a unit trust which borrows money to acquire the property. Seek legal, taxation and financial advice before trying any of the above.