Self Managed Super Fund (SMSF) trustees should not forget property as part of their investment strategy as part of maintaining a balanced investment portfolio for their members.

Property investment can be through owning units in a listed or unlisted property trust, or can be direct ownership in residential, industrial or commercial property.

Limited recourse borrowing arrangements (“LRBA”) allow SMSF’s to borrow to acquire property. Special arrangements are required to hold the property for the benefit of members in a trust arrangement to provide financier security on the property alone and not other SMSF assets.

The choice of what form of property investment should be made is dependent upon the unique circumstances of each SMSF and their members.

There can be significant advantages in property investment through SMSF, but all relevant issues need to be considered before investing in property. One significant possible advantage is selling property held in a SMSF when it is in pension mode to members, resulting in no capital gains tax on capital gains made.

Please contact Matt Schlyder on matt@fwo.net.au for more information on how a Self-Managed Superannuation fund could benefit your business.