COMPLIANCE
Options for acquiring real estate
Funding a property purchase can be challenging due to the size of the capital outlay required. John Maroney outlines two methods that can make the process easier and the associated compliance issues requiring attention.
JOHN MARONEY is chief executive of the SMSF Association.
54 selfmanagedsuper
Investing in property via an SMSF continues to grow with commercial and residential properties representing the third most popular asset class for SMSFs. Comprising about 15 per cent of all SMSF assets, behind Australian shares and cash and fixed deposits, it’s a percentage that has remained constant over the year even though the total value of assets owned by SMSFs has increased. No doubt most SMSFs have a knowledge of this asset, both residential and commercial. In this
instance familiarity does not breed contempt – quite the opposite. Adding to property’s allure is the ability for SMSFs to borrow to purchase new property as it offers trustees an opportunity to acquire real estate that might otherwise be beyond their financial reach. Borrowing can also allow an SMSF to achieve greater asset diversification as a smaller proportion of the fund’s assets are required to be invested in property as opposed to directing a large portion
