5 Facts to Using a SMSF to Invest in WA Property

A self managed super fund is a small superannuation fund created for one to four members designed to create wealth. Investing in WA property in your SMSF can be done, and we provide the five facts that you should know before buying.

1. SMSF must have an investment strategy

An investment strategy can be simple, and must include actionable strategies to: maximise member investments; provide diversification across asset classes; include a strategy for paying benefits and maintaining liquidity; and take into account each member’s term to retirement, at minimum.

2. SMSF can invest in any property type or sector

Generally speaking, a SMSF can purchase just about all types of property (including vacant land). In order to invest widely in any type of property, trust deeds must include provisions allowing direct property as an approved investment. It must also be flexible enough to match the risk profile of the member.

3. SMSF can’t buy property from a related party

It is against the law to buy an asset including property from a related party. All investments must be strictly at arm’s length.

4. SMSF can buy your business property

The good news for business people is that a SMSF is allowed to invest in, or buy your business premises, provided it is used wholly and exclusively for the business.

5. SMSF can develop property

Generally speaking a superannuation fund cannot develop property, however, should a potential development represent a small portion of the fund’s total value and is in-line with the investment strategy, incorporating all the other assets in the fund, it may be successfully argued that it is appropriate

Join us on Friday when we give another 5 tips to purchasing property in your SMSF.

It is important to seek professional advice before looking to buy property through a Self Managed Super Fund.