Borrowing within super can have its benefits as can borrowing within super from yourself. This is referred to as related party borrowing. But it is very important that you consider the safe harbour provisions and the limited recourse borrowing (LRBA) requirements to ensure you are meeting your obligations as trustee.

Both existing and new related party borrowing must consider the guidelines within the safe harbour provisions set out by the ATO as they are now in full effect.

• Have a loan agreement in place for the related party borrowing
• Ensure the loan agreement sets out a maximum loan term of 15 years (previous term of loan is deducted if the loan is refinanced)
• Ensure the interest rate is based on the Reserve Bank indicator lending rates as per publication every May
• Ensure that if a fixed rate is used then a maximum of 5 years applies
• The loan to market value ratio must not exceed 70%
• Register a mortgage over the property upon purchase
• Repayments must be principal and interest and made at least monthly

If the related party borrowing meets the above guidelines then the ATO will deem the loan to be on an arm’s length basis. So when you start thinking about a related party borrowing within your super fund make sure you consider all of the above guidelines.

There are many other considerations with regard to borrowing and purchasing property in your super fund so contact us here to discuss this further.


This information has been prepared without taking into account your objectives, financial situation or needs. Because of this, you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation or needs.