Does your SMSF need to pay for LRBA setup costs?

When a self-managed superannuation fund (SMSF) acquires an investment property using a loan, a number of setup costs are usually incurred. For example, costs to incorporate a company that will act as the custodian or bare trustee, responsible for holding legal title for the investment. In addition, there will usually be legal fees to document the custodian/bare trustee that is holding the investment for the benefit of the super fund. Other costs might include, loan establishment fees, valuation fees, and other associated expenses.These are all costs associated with the fund’s acquisition of the geared investment.

It's important for trustees of SMSFs to carefully consider and document all expenses related to these setup costs and the maintenance of a super fund loan to ensure compliance with superannuation laws and regulations. Making sure the super fund is correclty named on all invoicing is important. Consult with your SMSF Accountant or financial advisor about the deductililty of these costs to your fund. For the appropriate lending to assist in purchasing commercial or residential property, contact an SMSF lending specialists Etairos Finance to help you with your Limited Recourse Borrowing Arrangment (LRBA).