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SMSF - Direct Property

Discussion in 'Medium/Long Term Investing' started by Jimminy, May 1, 2008.

  1. Jimminy


    Likes Received:
    Feb 11, 2007
    If a self managed superfund buys an industrial property direct (no loans or finance) that is leased to a non-related tenant - does the SMSF have to appoint a property manager (ie. third party, non-related to trustees)???

    I am aware that you do if you take out, say, an installment warrant to purchase the property.

    So for example if I am a trustee of the SMSF can I be the property manager still?

    Any information would be appreciated. Would ask my acct but he is on hols.
  2. numbercruncher

    numbercruncher Beware of Dropbears

    Likes Received:
    Oct 12, 2006
    Im no expert, but I cant see why you would have to, but if you were to be a paid (from your smsf) property manager i doubt it would be acceptable.

    Your SMSF can lease Business real property to anyone, even a relative from my understanding of the legaslation as long as its at market rates.

    Its residential that your SMSF cant lease out to related bodies, well actually I beleive you can as long as that property doesnt equate to more than 5% of your smsfs value, but your smsf would be worth like 10m to take advantage of that!

    Well this is my understanding of the rules hopefully someone in the Industry can answer with 100pc certainty.

    I always just phone the tax office when after the rules(that I cant find on their website), they are always helpful and knowledgable, and free !
  3. MikeF


    Likes Received:
    May 1, 2008
    Some "Instalment Warrant" products may require you to appoint a property manager however some banks now lending funds under the new SIS Act section 67 (4A) exemption arrangement, do not care who looks after the property.

    So in answer to your question, I believe that as the trustee you can manage it.

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