Purchasing property in a Self Managed Superannuation Fund

Notwithstanding lingering uncertainty about the future of limited recourse loan arrangements for self managed superannuation funds (SMSF), acquisition of real property remains a popular investment strategy for SMSF trustees. When considering purchasing real property, SMSF trustees need to be aware of the strict rules that apply, particularly when borrowing money or when purchasing property from entities related to the fund. Given the potentially catastrophic outcomes if a SMSF is declared non-complying, trustees should ensure they obtain proper legal and financial advice before committing to a purchase.

Limited recourse borrowing arrangements

In December 2013 the Government announced the terms of reference for the Financial System Inquiry, to be chaired by David Murray AO. The Inquiry was charged with “examining how the financial system could be positioned to best meet Australia’s evolving needs and support Australia’s economic growth”.