Investing in Property (No SMSF Borrowing)
Clients of ESUPERFUND are permitted to invest in Property where the SMSF does not borrow to acquire the Property.
Record Keeping
In relation to record keeping for Property Investments, ESUPERFUND will send you a Checklist each year guiding you on what documentation we require to prepare your SMSF's annual compliance requirements.
Allowable Property Investments
A SMSF can purchase Residential Property or Business/Commercial Property, to the extent that the purchase is not made from a Member or an associate of a member (see below).
Property must be rented to third parties unrelated to Fund Members
Property acquired by a SMSF must be rented out to third parties unrelated to you. This means you cannot rent a property to family including parents, siblings, children or your spouse. You can however rent the property out to unrelated friends.
Investing in Property (With SMSF Borrowing)
Clients of ESUPERFUND are currently not permitted to invest in Property where the SMSF borrows to fund the Property Purchase. Please note however that ESUPERFUND is currently reviewing SMSF Lending Products available in the marketplace. Our review of the SMSF Lending Products aims to find a suitably priced SMSF Lending Product that complies with current ATO requirements. It is anticipated ESUPERFUND will be able to offer clients the opportunity to purchase Property using a SMSF "Non Recourse" Borrowing in the foreseeable future.
Transfer of Business Property from a Member to a SMSF
A SMSF cannot transfer an asset owned by a Member (or an associate of a Member eg family member by blood or marriage) to the SMSF unless the transfer is specifically allowed by legislation. Business Real Property (ie the property is used wholly and exclusively in one or more businesses) is allowed to be transferred from a Member (or an associate of a Member) to a SMSF at market value.
Transfer of Residential Property from a Member to a SMSF
A SMSF cannot transfer an asset owned by a Member (or an associate of a Member eg family member by blood or marriage) to the SMSF unless the transfer is specifically allowed by legislation. A Member (or an associate of a Member) of a Fund cannot transfer a Residential Property to a SMSF. This is illegal.
Investment in the Family Home
It is expressly forbidden for a SMSF to invest in the Family Home of a Member (or associate of a Member) irrespective of whether commercial rental is paid.