Step 1 – Find the Property the Super Fund wishes to purchase

Step 2- Obtain pre approval of the Loan

Some clients may however enter into contracts before pre approval of the Loan is made. Clients should consider Step 5 at this point if they are signing the contract before pre approval of the loan.

Step 3 – Determine who will act as Trustee of the Custodian Trust / Bare Trust.

The vehicle that holds the property on trust for the Super Fund is called a ‘Custodian Trust / Bare Trust. The Bare Trust must have a Trustee, and it is the Bare Trustee that holds title to the property. The Trustee of the Bare Trust must be a separate legal entity from the Trustee of the Super Fund. We recommend you use a Company to act as Trustee of the Bare Trust.

Step 4 – Have the required documentation completed for the Fund to commence the borrowing.

This documentation is required for the Fund to comply with the SIS Legislation and the Australian Tax Office requirements. This documentation includes:

1. The Bare Trust and establishment of a company to act as Trustee of the Bare Trust

2. Updating the Super Fund Trust Deed (if required)

Step 5 – Sign the contract in the name of the Bare Trustee

NOTE: the contract of sale can be signed before pre approval of the Loan, however it is preferable for the contract to be signed after the Bare Trustee has been determined (or if a Company, established) so the Bare Trustee can be noted on the contract.

Step 6 – Settle the property with the Bare Trustee as the title holder.