Navstar Financial Services & Solutions Pty Ltd ABN 14 110 510 024 SMSF BORROWINGS BACKGROUND In September 2007 the Federal parliament approved an amendment to the Superannuation Industry (Supervision) Act 1993 (the Schedule 3 to Taxation Laws Amendment Act 2007 which inserted a new subsection 67- 4A)) which effectively allows Self Managed Super Funds (SMSF) to acquire property with leverage. Prior to this SMSF were not able to directly leverage property investments. This means that SMSF’s can now borrow money to purchase real estate. Investors can have just as much choice and control over investment properties inside as outside their superannuation fund. The Product An important feature of Navstar Financial Solutions SMSF loan product range is that it allows individuals to find their own properties. This is an important point as it differentiates from many others lenders who link up with developers often to sell stock using warrants. Like other loans, all properties are required to be independently valued by our lender’s approved panel valuer. When you borrow to purchase a negatively geared property investment, you get a tax deduction in respect of the interest you pay (less rental income received), but you have to repay the principal in post tax dollars. The new SMSF loan goes beyond negative gearing and provides "Super Leveraged Property Investment" where principal repayments are made virtually from pre tax dollars (that is, income taxed at the concessionary, 15% contribution tax rate). The potential advantages of purchasing an investment property within an SMSF are further enhanced by the fact that, depending on the status of the SMSF at the time of disposal, the total gain should be entirely free of CGT (or, at worst, subject to an effective tax rate of 10%). Australian Credit Licence Number 385525