Great News for those investors seeking to incorporate lending within an SMSF to purchase investment property!
After months of speculation on whether the government will ban SMSF’s from lending, the government announced that it does not agree with the FSI’s recommendation to prohibit limited recourse borrowing arrangements (LRBAs) by superannuation funds.
This was the only recommendation not accepted by the government after it accepted the other 43 FSI recommendations.
“While the government notes that there are anecdotal concerns about limited recourse borrowing arrangements, at this time the government does not consider the data sufficient to justify significant policy intervention,” the government’s official response stated.
The government announced it will, however, commission the Council of Financial Regulators and the ATO to monitor leverage and risk in the superannuation system and report back to government after three years.
“This timing allows recent improvements in ATO data collection to wash through the system. The agencies’ analysis will be used to inform any consideration of whether changes to the borrowing regulations might be appropriate,” the government said.