What Is An SMSF Property?

An SMSF property is a residential property that has been purchased with a Self-Managed Superannuation Fund.

This means that the person who owns the property is also in charge of managing it, and they are not relying on an agent or other professional to do so. To purchase this type of property, you must have at least $200,000 in your super fund account before purchasing anything.

Some people choose to use their SMSF for real estate investing because, this way, they can keep track of how much money they're making from rental properties without any additional fees being taken out by banks or agents.

An SMSF Property is a particular kind of real estate investment that has been acquired by an SMSF. The primary asset of the fund is frequently real estate, which may be residential, commercial, or industrial in nature.

This article's goal is to demystify self-managed superannuation fund (SMSF) properties by describing what they are, why you would want one for your fund, and how they interact with other types of assets like as stocks and bonds.

The question "why shouldn't I just invest my superannuation into stocks?" is the one that comes to the minds of the vast majority of individuals as soon as they learn about the possibility of investing their superannuation in an SMSF property. In the following paragraphs, we will investigate the reasons why investing in properties held by SMSFs can be preferable for your fund. Continue reading if you want to learn more!

A self-managed superannuation fund (SMSF) property is a type of investment that can assist you in lowering your overall tax burden. It is most commonly utilised by retirees who are trying to enhance their income during retirement.

This article on the blog will explain what exactly an SMSF property is, how it operates, and the benefits that it offers to retirees. Continue reading this article if you are interested in gaining more knowledge regarding investments of this kind.

Homeowners who are unfamiliar with the term SMSF frequently have a lot of questions regarding the properties that fall under this umbrella. If you are one of these folks, hopefully the following few words can clear up any confusion that you may have.

If you are self-employed or the owner of a small business and do not have access to a superannuation plan, an SMSF may be a great option for you to save money for your retirement.

Whether or not you are retired will determine the rules that regulate how much money is in the fund, what it can be invested in, and when it can be withdrawn from the fund. These restrictions also differ based on whether or not you have already retired.

If you consider investing your retirement savings, it is important to understand how an SMSF property can help. An SMSF stands for Self-Managed Super Fund and is a type of investment that many people incorrectly think only applies to the wealthy or big corporations.

The truth is that anyone with at least $250,000 in savings can invest their money into an SMSF property - like farmland, commercial real estate, residential housing stock, or even shares on the stock market!

Let's get started!

Are You Capable of Managing an SMSF Property?

The use of a self-managed super fund (SMSF) to purchase real estate is gaining popularity, but before you make a purchase using your SMSF, you should give it some careful thought.

You need to make sure that it works in conjunction with your overall investing strategy and stays away from any excessive danger.

The capacity of self-managed superannuation funds, also known as SMSFs, to make direct investments in real estate is one of the distinguishing features that attract the attention of certain types of investors to these funds.

The percentage of self-managed super funds (SMSFs) that invested in natural resources reached as high as 27.1% in 2016, according to recent figures. This comprises residential as well as non-residential properties (i.e. commercial property).

What exactly is a Self-Managed Super Fund, sometimes known as an SMSF?

In the case of self-managed superannuation funds (SMSFs), almost half of the fund is invested in some form of real estate (47 percent for residential and 51 percent for non-residential).

However, the reality of investing in real estate is that it is extremely complicated, and it should never be regarded a simple way to enter the property market. Despite this fact, it is still one of the most common ways to build wealth.

A self-managed super fund, often known as an SMSF, is a type of retirement savings account that is handled by the account holder themselves as opposed to being managed by a superannuation provider.

The do-it-yourself super technique gives you the opportunity to maintain a closer relationship with the assets that you invest in and provides tax advantages that are not offered by major suppliers.

On the other hand, you will have a great deal more responsibility because you will be in charge of everything and will be responsible for ensuring that it is organised and managed appropriately.

SMSFs are not appropriate for everyone because they require a lot of effort and study on the investor's part. While some people flourish when given additional responsibility, others struggle to meet the challenge.

In contrast to a private superannuation fund that is administered by a superannuation provider like 'Australian Super' or 'QSuper,' a self-managed superannuation fund, also known as an SMSF, is controlled by its members.

It is allowed to have up to four members, all of whom are required to serve in the capacity of trustee. This indicates that each member of the fund shares an equal level of responsibility for decisions made regarding the fund as well as the fund's adherence to applicable regulations.

A trustee is also responsible for:

• Follow an investment strategy that would not go over your threshold for risk and will fulfil all of your requirements for retirement
• Have the necessary level of financial expertise to make decisions regarding investments,
• Maintain detailed records in preparation for audits
• Provide members of the fund with insurance coverage.

Your employer is required by law to make payments into your superannuation account. However, you won't be able to access those funds until you reach a "preservation age," which ranges from 55 to 60 years old depending on when you were born. Superannuation is a savings account for your retirement.

With a self-managed super fund (SMSF), you may give yourself more control over your retirement savings by determining how much money goes into it, where that money is put, and how much of it is invested there. SMSFs are a major responsibility that, once taken on, demand a significant amount of time and effort on top of sounding like a no brainer when you first hear about them.

In addition, they come with a multitude of costs, such as via charges and the expenditure of employing specialists such as accountants to assist you in the process.

Purchasing Real Estate Through Your SMSF

Self-managed super fund (SMSF) investors continue to show a strong preference for direct property investing as an investment choice. Nevertheless, before to taking any action, significant deliberation is required. It's possible that diversifying into other property asset types will assist SMSF investors accomplish the same result more effectively.

One of the most compelling aspects of self-managed super funds (SMSFs) is the level of control that trustees and members have over the investments made by the fund. The vast majority of investors have some level of experience in the property market, making it the third most common asset class for self-managed super funds (SMSFs).

Investing within a self-managed super fund (SMSF), on the other hand, comes with its own unique set of challenges, regulations, and potential outcomes. As a result, trustees ought to evaluate and contrast the various property investment vehicles available to them, including direct property investments, unlisted funds, and trusts, with regard to the risks, returns, and tax implications of each.

Investment Strategy for SMSFs

1. Consider investment diversification and risk

It's possible that you'll have a lot on your mind when you're the one in charge of every aspect of your superhero.

However, the level of risk your portfolio is exposed to and the degree to which it is diversified should be at the top of your list of considerations.

Your self-managed super fund (SMSF) needs to strike a balance between the potential for profit that an investment offers and the degree to which it will contribute to the fund's overall goals.

In addition to this, you should think about the degree to which your self-managed super fund is diversified.

Your Self-Managed Superannuation Fund (SMSF) investment plan could be made more secure by selecting investments that are sufficiently diversified. This will lower your exposure to any one particular asset or risk.

2. Think about several investment opportunities

One of the advantages of a self-managed super fund is that, in comparison to a standard fund, it gives you access to a wider variety of asset classes in which you can invest.

You have the option of purchasing actual commodities, shares in companies based in Australia and other countries, residential or commercial property, cash and term deposits, fixed income products, and more.

The answer to this difficult issue is heavily influenced by both your current circumstances and the kinds of financial outcomes you hope to achieve.

If you are looking for a reliable source of income, one option you have is to put your money into assets that are considered safer but still guarantee a flow of money.

When accumulating wealth is a goal of yours, it is essential to make investments in assets that will experience an increase in market value over time.

But if you are already retired, protecting your funds may be your top priority. One way to do this is by choosing low-risk investment options such as term deposits or bonds, which produce lower returns but are less volatile.

Developing a sensible investing strategy for your self-managed super fund is one of the most effective methods to increase the amount of money you have set aside for your retirement, regardless of the decision you make.

3. Observe the rules of the SMSF investment strategy

Self-managed superannuation fund trustees and experts can benefit from the investing techniques that have been developed by the Australian Taxation Office (ATO), which is an agency in Australia.

Your SMSF investing strategy needs to include specific information about members' situations (such as age, work status, and retirement requirements), how these situations affect risk, and how investments fulfil each member's retirement goals.

The Australian Taxation Office mandates that an SMSF's investment strategy take into account risks, liquidity, and insurance as part of the process.

4. Purchasing a property through your SMSF

Your self-managed super fund (SMSF), in contrast to typical super funds, enables you to invest in both commercial and residential real estate; nevertheless, there are numerous limitations that you need to be aware of.

It is not permissible for a self-managed super fund (SMSF) to acquire residential property from a related party of a fund member, nor is it permissible for a fund member to reside in or rent out the purchased home. In addition, in order for your self-managed super fund to be able to buy your place of business, you will need to first start paying market-rate rent to your SMSF.

In most cases, self-managed super funds will be permitted to borrow up to 70–80 percent of the value of the property from lenders. Nevertheless, in most cases they demand that the SMSF employ a corporation rather than an individual as the trustee.

In addition, because SMSF borrowing is subject to limited recourse, lenders are becoming increasingly picky about whose applications for loans they would approve.

You should also evaluate how getting a loan can impact your cash flow, which is especially important to do if you make a modest salary.

5. Review and revise your SMSF investment plan as necessary

You can't just "set and forget" an investment strategy for an SMSF; you have to actively manage it.

You need to reevaluate your investment plan and make any necessary adjustments whenever there is a shift in the circumstances around your fund or if there is a downturn in the market.

The laws governing superannuation stipulate that your SMSF investing strategy must be kept up to date on a consistent basis.

You should review and adapt your SMSF strategy on a yearly basis to guarantee that you will continue to make progress towards achieving your retirement objectives.

6. Ask for guidance on your SMSF investing plan

Having an investment strategy for your SMSF that guarantees you will achieve your retirement objectives.

The superannuation specialists at LDB are able to assist with a plan review and provide compliance advise in order to guarantee that your SMSF satisfies the requirements set forth by the ATO and the relevant legislation.

What Amount Can My Super Fund Borrow to Purchase Real Estate?

When purchasing property for an SMSF, banks and other lenders will often lend up to 80 percent of the purchase price.

However, the lender will also check to make sure that the SMSF is capable of paying back the loan.

The lender will consider the existing balance and assets held by the SMSF, as well as the consistency of payments made to the SMSF and income generated from investments held by the SMSF.

Borrowing money for an investment that does not provide income is far more difficult than borrowing money for property that produces income.

In addition, the undeveloped property could not be used for any kind of construction.

When a person takes out a loan with limited recourse, the lender's liability is often restricted to the value of the property being borrowed against.

As a result, it is easy to comprehend why a lender could be reluctant to make a loan secured by undeveloped or rural land, given the possibility that they will have a difficult time recovering the money if they need to.

It is important for you to be informed that establishing an LRBA will incur additional expenditures in the areas of law, accounting, and lending.

Some SMSF expenses are tax-deductible, and some are not.

Direct Property Investment And Self-Managed Super Funds

Direct investments in real estate have always been permitted for superannuation funds, but in the past, many SMSFs lacked the capital necessary to pursue this strategy.

By enabling SMSF investors to borrow money to buy assets for their fund, the introduction of limited recourse borrowing arrangements (LRBA) in 2007 brought direct property investment within reach of a much larger number of SMSF investors. This was accomplished by lowering the amount of risk associated with borrowing money.

Since then, borrowing by SMSFs has seen significant growth, reaching a total of $25.4 billion in 2016 (the most recent year for which we have information), with the vast majority of that money being invested in real property assets.

On the other hand, if the fund and its assets are subjected to additional levels of expense and regulation because the borrowing was accomplished through an LRBA,

Whether your SMSF invests in direct property through lending or accumulated capital, the investment should be examined for its suitability based on the characteristics of diversity, liquidity, management, and cash flow.

The ability of the investment to make a contribution to the primary goal of superannuation, which is to provide an income in retirement, is the most significant consideration.

Can I Purchase Vacant Land Using My Super?

You will need to create a self-managed super fund (SMSF) in order to use your retirement savings to purchase undeveloped land.

Even if you are thrilled about the prospect of acquiring property, you should not rush into establishing a self-managed super fund (SMSF).

The costs associated with maintaining an SMSF are typically substantially higher than those of industry and retail super funds.

On the other hand, the charges associated with SMSFs are typically fixed, in contrast to the costs associated with industry or retail accounts, which are typically dependent on a percentage.

If you have a really high balance, more than one million dollars, an SMSF may be a more cost-effective option for you.

A self-managed superannuation fund (SMSF) not only comes with a high initial investment and recurring expenses, but it also comes with a lot of legal and administrative duties.

You must have a comprehensive understanding of all of your responsibilities as a trustee of an SMSF.

It is also strongly recommended that you seek the guidance of a professional when establishing and managing the SMSF.

Should I Purchase Vacant Land With My Super?

Any investment that is made within an SMSF ought to be made with the sole intention of benefiting the members or the dependents of the members.

The Sole Purpose Test details a number of essential as well as supplementary purposes for which the SMSF needs to be maintained.

It is essential to be aware of the fact that an SMSF is not permitted to acquire assets from a connected party unless the assets in question are business real estate or listed stocks.

It's unlikely that undeveloped land would qualify as "business real property," but you never know.

In addition, there can be no conflict of interest in any of the deals that are done.

Is it a smart idea to assume that you will purchase land from a third party on an arms-length basis for the benefit of members of an SMSF, assuming that you will be doing so?

It's possible that buying land is a smart move, but before you do so, you should examine all of your options.

Considerations Before Using a Superfund to Purchase Land

To begin, if you plan to purchase undeveloped land, you must have a reasonable expectation of the land's nett returns.

Will there still be money contributed to the SMSF even if the land is uninhabited?

In that case, how much of a profit can be expected from the land? What is the yield, calculated by dividing the annual income by the value of the land?

When compared to the interest rate you would receive on the money if it were kept in a risk-free bank account, this yield is quite low.

Are you gambling on the land's worth improving even if it won't create any revenue for you?

If such is the case, then please explain the rationale behind this increase in value. Is the information you obtained reliable?

You will need to take into consideration all of the continuing costs that are related with the land, such as taxes or land rates.

In addition to the expenditures associated with operating the SMSF, there will be land charges. Will the increase in land value be sufficient to compensate for these costs?

You also need to take into consideration the initial charges, which include things like land stamp tax, legal fees, and SMSF setup costs, among other things.

To what extent does the value of the land need to rise in order to cover all of these costs, and how long do you anticipate it will take for this to happen?

Is there an other type of investment that has fewer costs and could yield the same amount of nett return in a shorter amount of time?

How are all of the upfront and continuing costs going to be covered, especially considering that the land itself does not yield any income?

Investing in undeveloped land might not be a good choice if you do not have a lot of expertise in buying land or if you do not have a solid understanding of the various phases that real estate goes through.

Finally, you need to consider what would take place if a member of the SMSF passed away and the bulk of the SMSF's balance was comprised of land, as this is the final step.

How would the SMSF pay a death benefit out of the SMSF that was equivalent to the member balance of the person who passed away?

Property Regulations for Self-Managed Superannuation Funds

If you are in compliance with the requirements, you will be able to use your SMSF to purchase real estate.

The property has to have:

• fulfil the requirements of the "sole purpose test" by offering retirement benefits to fund participants only
• not be purchased from a member's family member, spouse, or other linked person
• not be occupied by any member of the fund or any linked party of any member of the fund
• not be rented by a member of the fund or any parties associated to members of the fund.

If your SMSF decides to purchase commercial property, that property can then be rented out to a member of the fund for use in that member's company. Nevertheless, it needs to be rented at the going market rate and adhere to certain regulations.

When you become a client, you will have the opportunity to invest your SMSF in both residential and commercial real estate.

When it comes to making investments in real estate for your SMSF, there are a number of very particular laws and regulations that need to be followed. If you are considering buying real estate for your SMSF, it is highly recommended that you become aware with these rules and regulations first.

When you invest in the real estate market through a self-managed fund, you have the opportunity to speculate on the value of various types of property, including residential, commercial, and industrial real estate.

You must, however, take into consideration the rules and regulations, as well as the finest property class.

Any piece of real estate in which you invest must:

• pass the "single purpose test," which indicates that it is maintained for the purpose of providing retirement benefits for its members
• not be occupied by anyone or anything associated to the member, including the member themselves
• cannot be purchased from a party that is related to the seller
• not rented by a person or business connected in any way to a member of the fund.

Can You Buy a Property With Your Self Managed Super Fund (SMSF)?

The use of self-managed super funds (SMSFs), which can be put towards the purchase of investment properties, has grown in popularity among Australians in recent years.

A fund that is self-managed has the ability to borrow money in order to purchase either a single asset or a collection of assets that are all the same and have the same market value.

This is typically accomplished through Limited Recourse Borrowing Arrangements (LRBA), which are the primary factor for the widespread use of SMSFs to buy real estate.

In this particular approach, the trustees of the SMSF take possession of the beneficial interest in the item that has been purchased, while the trust retains legal ownership of the asset.

The positive aspect of using an LRBA is that if you default on the loan, your whole retirement account will not be jeopardised. However, constraints also include limitations placed on the methods a debtor can use to recoup its losses.

If the trustee of the SMSF determines that the asset in which it is intended to invest would fulfil the SMSF's Investment Objectives, the fund may choose to implement a single-asset strategy. The relevant Concentration Risk has been taken into consideration by the Trustees.

Trustees of SMSFs are required by law to have an investing strategy that incorporates diversification. Therefore, choices regarding investments are the responsibility of SMSF trustees, and it may be wise to seek the opinion of a financial professional.

Although an SMSF can be used to purchase residential real estate, doing so is subject to a number of restrictions.

The following is a list of some of these limitations:

• It is against SMSF rules for a trustee or anybody associated to the trustee to reside in a residential property that was acquired using SMSF funds
• It is forbidden for the trustee or anybody related to the trustee to rent out the property that was acquired using the SMSF
• It is against the rules for the SMSF to purchase a property that is already owned by a trustee or someone associated to the trustee
• The acquisition must pass the "sole purpose test," which requires it to be used exclusively for the purpose of providing retirement benefits to fund members.

The objective of the sole purpose test is to guarantee that the SMSF is used for the sole purpose of delivering benefits to members upon their retirement or to their dependants in the event that the member passes away before they reach retirement age. It can be considered the SMSF property investment equivalent of the golden rule.

In addition, you are unable to incorporate an existing residential property that is owned by a trustee into the SMSF by purchasing the property.

It is essential to keep in mind that buying a home with money from a self-managed super fund (SMSF) is significantly different from getting a home loan from an SMSF to finance the purchase of a property. This is a very different and more difficult kettle of fish, which we will get into later on in the conversation.

The purchase of commercial property by SMSF investors is typically seen as more appealing than the purchase of residential property.

The use of an SMSF to acquire commercial property is still subject to the same restrictions as the use of an SMSF to acquire residential property. These limits include the "sole purpose test."

The purchase of a commercial property by a small or medium-sized business (also known as a SME) using a self-managed superannuation fund (SMSF) and then leasing it back to the SME while paying rent to the SMSF is a popular practise.

This is permissible under the condition that it is carried out on a "arm's length basis." This indicates that all investments ought to be managed in a strictly commercial manner, with assets reflecting their accurate value in the market.

If you are considering doing this, there are numerous other conditions that you need to follow in addition to the sole purpose test, which are as follows:

• The terms of the lease ought to be commercially viable and in line with market value. You cannot save money by charging your partners in business higher rates while renting the property to yourself for a far lower amount than it is actually worth.
• You are obligated to have frequent valuations done on the property in order to ensure that the rent you are paying is equivalent to the property's value on the market.
• You are responsible for making on-time and complete payments of the rent at all times. As is the case with all other rental agreements, you are not permitted to pay even a day or two late on the grounds that you have had a less than successful week.

In the event that you do not adhere to these restrictions, the compliance status of your lease will be revoked. It is not worth it to engage in rule breaking since SMSFs are scrutinised by the ATO, which conducts frequent audits of them to verify that their members are in compliance with the regulations. In addition to that, you are obligated to perform an annual audit on yourself.

What Exactly Is Meant by SMSF Investments in Real Estate?

As a result of the fact that it enables investors to exercise full control over their own investing decisions, Self-Managed Super Funds (SMSFs) are quickly becoming one of Australia's most prominent, well-liked, and lucrative investment options.

Investors are given the freedom and flexibility to make their own judgments on their investments, as well as their capital returns, growth methods, and overall performance.

Sentinel Property Group is recognised as a leading investment firm and possesses an unrivalled track record of positive investment performance. The company provides a variety of services, one of which is geared specifically towards the property investment needs of self-managed superannuation funds (SMSFs).

Investors in Sentinel are guaranteed a monthly return, which is deducted directly from the rental income generated by their homes.

Investors in Sentinel get not only these monthly returns, but also extraordinary capital return payments on revaluations and capital growth returns on disposal in addition to these regular yields. For anyone thinking about putting their retirement savings into real estate, this is a combination that is quite desirable and appealing.

Investing in real estate through a self-managed super fund (SMSF) allows you to exert a greater degree of control on the expansion strategies of your investments.

Therefore, it is essential for investors to conduct exhaustive research on all of the opportunities that are available and to make certain that the investments they choose to make deliver returns that are superior to the average or average-plus returns that are widely accepted by a large number of investors as being "the norm."

The Benefits Of Investing In Property Through A SMSF

The ability to directly engage in real estate, including commercial real estate, is one of the most significant advantages offered by self-managed superannuation funds (SMSF).

Increasing your retirement savings with favourable long-term returns and capital growth can be accomplished through the use of a self-managed superannuation fund (SMSF), which is an ideal way to achieve your desired investment property goals.

The maximum amount of tax that you will be required to pay on rental income is fifteen percent, and if your SMSF is provided while it is in the pension phase, you will not be required to pay any tax at all. This is one of the many tax advantages that come with investing in real estate through an SMSF.

Additional perks and advantages of investing in commercial property through an SMSF include the following:

• Obtaining a level of control over your investments and superannuation that is only obtainable through the purchase of an investment property held within a super fund
• Investing your SMSF in commercial property by purchasing it and then renting it out
• Achieving variety within your Self-Managed Superannuation Fund
• When purchasing real estate with a Self-Managed Super Fund (SMSF), investors should keep their investment goals of consistent returns, future capital growth, and tax reduction at the forefront of their minds at all times. As a result, the primary goal of property investment conducted through an SMSF ought to be to maximise profits while simultaneously pursuing expansion.

Investors using SMSFs to purchase commercial real estate have the opportunity to make direct investments in a variety of high-quality commercial properties. These investments will provide investors with consistent monthly returns, additional capital returns, and capital growth. The best part is that investors do not need to manage the property themselves.

Lacking Enough Super Savings?

If you are looking for a means to buy a residential property but your super fund does not have enough money or if you do not want to go through an LRBA, there is another alternative that you can investigate. This option is known as a limited recourse borrowing arrangement (LRBA).

You would be able to divide the amount that you borrow between your primary residence and your retirement account if you had a Tenants in Common (TIC) arrangement.

For instance, if the price of the home you wish to purchase is $400,000, you could utilise a TIC to borrow $200,000 against the equity of your primary residence and spend $200,000 from your retirement savings account.

Developers of real estate and SMSFs

In order to give advice on financial planning, real estate developers need to obtain a valid AFS licence. This includes providing guidance on the establishment of an SMSF.

It's possible that property developers already have working relationships with the industry professionals they propose to their clients. As a consequence of this, they might be entitled to a referral fee or other advantages, the total value of which might be several thousand dollars.

Avoid giving in to any pressure to make judgments on the purchase of real estate for an SMSF. Be on the lookout for sales strategies instead, such as contests, free flights to sales meetings, or being taken out for free dinners.

If you are not well-versed in the local real estate market, you should exercise caution before investing there. First things first: do some research.

Costs Associated With An SMSF Property

There could be a variety of fees associated with the sale of SMSF property. These costs might build up over time, which will result in a lower balance in your super account.

Find out everything that will cost you before you sign up. Among the costs are:

• upfront fees
• legal fees
• advice fees
• stamp duty
• recurring costs associated with property management
• bank fees

Be aware of groups of advisers that demand fees for their services and who also suggest each other's businesses. It is crucial to receive impartial guidance.

In Australia, a licence to provide advice on self-managed super funds (SMSF) is known as an Australian financial services (AFS) licence. If a corporation or individual in question possesses an AFS licence, you will be able to determine this through ASIC Connect's Professional Registers.

SMSF Borrowing

When you borrow against your retirement savings or gear them up to invest in property, you are subject to highly stringent borrowing terms. This kind of borrowing agreement is known as a "limited recourse borrowing arrangement."

A limited recourse borrowing agreement can only be used to finance the acquisition of a single asset, such as a single piece of real estate (either residential or commercial).

It is important that you determine whether or not the investment adheres to the risk profile and investment plan of the fund.

The following are examples of property concerns for geared SMSFs:

• The interest rates on SMSF property loans are typically higher than those on other types of loans.
• Cash flow is essential, as your SMSF must pay back any loans it has taken out. As a result, your fund must always have adequate liquidity or cash flow in order to be able to meet the payback obligations of the loans.
• It is difficult to cancel the arrangement since, if your SMSF property loan documentation and contract are not set up appropriately, you will not be able to get out of the agreement. It is possible that you will have to sell the home, which could result in significant losses for the SMSF.
• Possible tax losses You won't be able to deduct the tax losses from the property from the taxable income you bring in from sources other than the fund.
• No Alterations to the Property Allowed Until the SMSF Property Loan Is Paid Off Before you are allowed to make any changes to the property that alter its character, you must first pay off the SMSF property loan.