It is no secret that more and more people are using their SMSF
to invest in property and also to borrow through their SMSF to fund
What sort of real estate can my SMSF invest
An SMSF can invest in any property you could buy personally. For
example, an SMSF can invest in residential property (such as
houses, units, townhouses and vacant land) as well as commercial
There are a number of lenders including the major banks who have
loan products tailored for SMSF borrowings to fund acquisitions of
different types of property.
What are the benefits of purchasing property through
There are many benefits, for example:
Diversification of your investment portfolio;
Accessing the equity in your SMSF;
Potential for capital growth;
Potential asset protection; and
The bank's rights are on a "limited recourse"
basis. This means that the bank only has recourse against the
particular investment property and no other assets of the
What are some of the disadvantages of purchasing
property through your SMSF?
There are things to consider before your SMSF invests in
property as there are stringent rules surrounding who the fund can
purchase from and the structure put in place when borrowing
For example, the purchase of residential property must be
"at arm's length" but you can buy a commercial
property from a related party provided certain conditions are met.
It is possible to have your business premises in your SMSF if the
requirements of the legislation are met.
Before you take the plunge......
Purchasing or borrowing through an SMSF may not be for everyone.
If you are considering it, it is important to get the right advice
from professionals such as solicitors, accountants and financial
planners who have experience in this field so that the correct
documentation and structure is put in place.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Long experience representing many of Australia's leading employers has taught us that in employment litigation the identity of an employee's representative is a major factor in how employee litigation runs.
Australian employees receive certain entitlements (such as annual leave and superannuation) where contractors do not.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).