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SMSF Property Rules

In accordance with SMSF property rules it is possible to invest in all kinds of property through an SMSF, including residential, commercial and industrial property. Under certain circumstances it is even possible to invest in agricultural property.

To take advantage of these investment opportunities it is necessary to understand and adhere to the SMSF property rules. That’s why it’s important to seek expert financial advice. At Self Managed Super Fund Company , our team of experienced professionals can advise you on all aspects of SMSF property rules.

In recent years the SMSF property rules have been relaxed, making it easier to purchase and invest in assets through a self managed super fund. However, the particular borrowing arrangements allowed within an SMSF to purchase property are still tightly regulated.

While there are several SMSF property rules and regulations, let’s consider a few of the more important ones.

To begin with, any property purchased through a self managed super fund must be a single acquirable asset. In plain terms, this means that an SMSF is restricted from buying several properties under the one borrowing arrangement. SMSF property rules dictate that any borrowed money can be used to buy one property only.

Furthermore, any property purchased through an SMSF cannot be replaced or improved upon while the loan is still outstanding, preventing the investor from engaging in property development through their SMSF.

Another key aspect of SMSF property rules is limited recourse borrowing arrangements (LRBA). With a couple of exceptions, purchasing any asset including property through an SMSF requires the trustee to use an LRBA. In 2011 the ATO released a ruling to clarify the rules relating to limited recourse borrowing arrangements. This ruling, which deals mainly with the purchasing of real estate, has allowed for greater investment opportunities for anyone running a self managed super fund.

To understand and take advantage of the property investment opportunities afforded through an SMSF, it is essential to get informed, professional advice.

With a detailed understanding of SMSF property rules, the financial experts at Self Managed Super Fund Company will provide you with the assistance you require.

Call us and make an appointment today.