As global political instability continues to make waves in the media, more and more Australians are looking for ways to protect their retirement funds. We're seeing a surge in SMSF inquiries as clients seek greater control over their financial future and focus on safe, long-term investments.
Many of us, myself included, still remember the heavy losses we faced during the GFC—losses that wiped out superannuation savings, both personal and from our parents. It’s no wonder that so many are turning to Self-Managed Super Funds (SMSFs) as a way to safeguard their wealth, especially by investing in secure assets like residential property.
A popular strategy we’ve seen is investing in new property located in the key areas identified by our award-winning Calla Property Insights research. These areas represent strong investment opportunities for SMSF investors. However, there are important rules to keep in mind when it comes to property investments within your SMSF.
SMSF Property Rules: Compliance is Key
Under Australian law, SMSFs must adhere to strict guidelines when it comes to property investments. According to SISA Section 66 and SISR Regulation 13.22C, SMSFs cannot substantially improve the value of a property beyond the necessary maintenance or repairs. Any significant renovations that increase a property’s value too much could breach the sole purpose test, potentially jeopardising your fund’s compliance and tax status. Clearly buying a block of land on one contract, and building a house under a different contract would 'substantially improve the value of the property'.
While many clients are interested in new single-contract new properties, for this purpose, it can be challenging to find builders who will take on these types of projects (other than apartments and townhouses) due to funding and the risks that the builder takes in doing so.
Here’s where we come in.
We work with trusted builders across Victoria and Queensland who specialise in delivering compliant, single-contract builds for houses, duplexes, and dual-occupancy properties. This ensures that your SMSF remains compliant while enabling you to invest in high-quality, growth-oriented assets.
Plus, our network of financial advisors, accountants, lawyers, and brokers are available to help with SMSF setup, compliance, and financing—ensuring a smooth and fully compliant investment process.
