Quoted in The Australian – Trustees clear for property plunge
Journalist Andrew Main contacted me for comment on the Government’s rejection of the Financial System Inquiry recommendation to ban borrowing money in super to buy property. I had interviewed Louis Christopher, Managing Director of SQM Research just a few weeks prior to this and Louis mentioned that self managed super funds (SMSFs) represented a relatively small proportion of property transactions in Australia and in his opinion, were not responsible for pushing prices higher.
Borrowing money to buy property in super requires expect advice. There are issues such as setting up additional structures to accomodate the loan (bare trust and bare trustee), understanding of the lengthened timeframe to buy (to allow for extra legal checks and other SMSF related requirements) and ensuring that cash flow and capital numbers are calculated with a safety margin built in.
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