Also called: LRBA, Limited recourse borrowing arrangement
SMSF loan
An SMSF loan is borrowing by a self-managed superannuation fund to acquire an asset, structured in Australia as a limited recourse borrowing arrangement. The asset is held in a separate bare trust and the lender's recourse is limited to that asset.
What is a smsf loan?
An SMSF loan is borrowing by a self-managed superannuation fund to acquire an asset, structured in Australia as a limited recourse borrowing arrangement. The asset is held in a separate bare trust and the lender's recourse is limited to that asset.
Example
A fund buys a $900,000 commercial unit with a $585,000 LRBA at 65% LVR, with the trading business paying market rent to the fund.
Why it matters
Superannuation and tax rules are strict and mistakes are expensive — licensed SMSF advice is essential before proceeding.