SMSF for Self Employed

SMSF for Self Employed is a great option for business owners to secure their retirement and create long term wealth. The lending rules for SMSF home loans however are different for self employed individuals. Lenders are are a little more stringent for people who run their business. WizWealth Finance has helped number of self employed applicants secure a cost effective SMSF home loan for residential and commercial properties. 

Navigating the world of SMSF for Self Employed requires experience, knowledge about the relevant compliance. Detailed planning is what precisely sets WizWealth Finance apart. We review the best SMSF home loan providers across Australia and recommend a solution most suited to your needs. 

Why is SMSF good for Self Employed individuals?

The key reason why self-employed individuals get a commercial property in SMSF is to be able to use it for their business. Unlike a residential property, commercial property can be used to run your own business. This makes it a good financial proposition as it offsets the rent you would otherwise have to pay for someone else' commercial property.

Moreover, investing in a commercial property through a SMSF for Self Employed offers tax advantages. Self-employed individuals can enjoy potential tax deductions on mortgage interest and property-related expenses. You can even claim depreciation on the property. This creates significant financial benefits, enhancing the overall return on investment.

Additionally, holding a property within an SMSF allows for strategic retirement planning. The property value may appreciate over time, contributing to a more substantial retirement fund. Furthermore, the autonomy of managing the property within the SMSF provides flexibility and control. It empowers self-employed individuals to tailor their investment strategy according to their business needs and financial goals.

Key SMSF Lending Policies for Self Employed

Lenders understand the financial challenges that come with being self-employed, where income can fluctuate. This fluctuation sometimes leads to missed contributions to superannuation (super) as self-employed individuals prioritise their business needs.

However, these missed contributions may not accurately reflect the overall health of the business or its ability to contribute to super in the future. In response to these challenges, SMSF home loan lenders have developed special policies to assist self-employed. These policies help individuals in acquiring property through their Self-Managed Super Fund (SMSF).

  1. One notable policy is the option to secure an SMSF loan based on future commitments. This means that even if you haven't made super contributions in the past two years  you can still borrow funds to purchase a property in your SMSF. The requirement is for you to commit making future contributions. This flexibility recognises that the ability to contribute to super can improve over time
  2. Moreover, lenders permit the utilisation of income outside the SMSF when determining the borrowing capacity for the SMSF loan. For instance, if you haven't contributed enough to your super in the last two years, banks may consider your personal income to assess your ability to repay the SMSF loan. This approach acknowledges that income sources may vary for self-employed individuals.
  3. Additionally, some lenders consider contributions made in the current year, right before the SMSF loan application, when evaluating serviceability for an SMSF home loan. This means that recent contributions can positively impact your ability to secure an SMSF loan.

It's important to note that while these policies can be beneficial for certain individuals, our team of SMSF experts carefully assesses each individual's situation before recommending a lender. This consideration is crucial because although some lenders offer flexibility, they may charge a slightly higher interest rate to accommodate special circumstances.

Therefore, our experts aim to strike a balance between flexibility and cost-effectiveness in recommending a lender that aligns with your specific needs and financial goals