SMSFs can borrow to invest in property under limited recourse borrowing arrangements, provided specific legal and structural conditions are met.
If you’re considering this strategy, SMSF Financial can provide general guidance on the requirements involved — helping you understand the steps needed to stay compliant with current superannuation laws.
All investments made through your SMSF must meet the sole purpose test, meaning they are intended exclusively to provide retirement benefits to members (or their beneficiaries in the case of death).
This means any property — or other fund assets — must not be used for personal enjoyment or benefit, either by members, relatives, or related parties.
Breaching the sole purpose test can result in your SMSF being made non-complying, up to 47% of the fund’s assets lost in tax, disqualification as a trustee, and personal fines of up to $18,780 per trustee.
Before purchasing property through your SMSF, it’s important to understand the compliance requirements. Contact SMSF Financial for general guidance on what trustees should consider.
Managing your own super fund involves a range of responsibilities — and staying compliant with SMSF regulations can quickly become overwhelming.
Through our sister company, SMSF Admin Solutions, trustees receive professional accounting and tax support tailored to the needs of SMSFs. We also coordinate with independent auditors and actuarial professionals to help meet your fund’s ongoing compliance obligations.
Combined with our general guidance and trustee support, this structure helps make running an SMSF simpler, clearer, and more efficient.
Need help understanding what’s involved in managing an SMSF? Contact our team today for general guidance.
Establishing a self-managed super fund (SMSF) involves several steps — from legal setup to regulatory compliance. At SMSF Financial, we support SMSF trustees by coordinating with experienced service providers to help ensure each step is completed in accordance with current legislation.
This article is based on the ATO’s guide to running an SMSF and outlines where general guidance and administrative support may be required.
Superannuation law strictly prohibits lending money from an SMSF to a member, their family, or related parties. It also prohibits related parties from using any SMSF-owned assets (such as property) for personal benefit or enjoyment.
Breaching these rules can lead to serious consequences — including your fund being made non-complying (which could result in up to 47% of the fund’s assets lost in tax), trustee disqualification, and personal fines of up to $18,780 per trustee.
If you’re unsure about how the lending and asset-use rules apply to SMSFs, contact SMSF Financial for general guidance on what trustees need to know.
