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ActOn Wealth Team | March 14, 2025

Navigating Property Development via SMSF


Investing in property development through a Self-Managed Superannuation Fund (SMSF) offers a pathway to wealth accumulation, but requires careful navigation of complex regulations. Adherence to the sole purpose test, avoiding personal benefits, and maintaining arms length transactions are crucial. While SMSFs can borrow to acquire property, improvements cannot be funded through borrowed means. At Acton Wealth, we provide strategic planning, compliance assurance, and risk management to help you successfully navigate SMSF property development while aligning with your retirement goals.


5

5 from 174 reviews

Investing in property development through a Self-Managed Superannuation Fund (SMSF) offers a pathway to wealth accumulation, but requires careful navigation of complex regulations. Adherence to the sole purpose test, avoiding personal benefits, and maintaining arms length transactions are crucial. While SMSFs can borrow to acquire property, improvements cannot be funded through borrowed means. At Acton Wealth, we provide strategic planning, compliance assurance, and risk management to help you successfully navigate SMSF property development while aligning with your retirement goals.
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"​Investing in property development through a Self-Managed Superannuation Fund (SMSF) is possible but requires careful navigation of complex regulations to ensure compliance and protect retirement savings.​"

ActOn Wealth Team​Investing in property development through a Self-Managed Superannuation Fund (SMSF) is possible but requires careful navigation of complex regulations to ensure compliance and protect retirement savings.​

ActOn Wealth Team

Team ActOn Wealth


Navigating SMSF Property Development

​Investing in property development through a Self-Managed Superannuation Fund (SMSF) is possible but requires careful navigation of complex regulations to ensure compliance and protect retirement savings.​

Direct Property Development Within an SMSF:

SMSFs can engage in property development directly, provided they adhere to specific rules:​

Sole Purpose Test: The development must solely aim to provide retirement benefits to members, avoiding any personal or immediate benefits. ​

No Borrowing for Improvements: While SMSFs can borrow to acquire property through a Limited Recourse Borrowing Arrangement (LRBA), they cannot use borrowed funds for property improvements or developments. Therefore, sufficient liquid assets are necessary to fund any development activities. ​

Arm's Length Transactions: All dealings must be conducted on a commercial basis, ensuring no favorable terms with related parties. ​

Using Unit Trusts for Property Development:

An alternative approach involves investing through a unit trust:​

Non-Geared Unit Trusts: SMSFs can invest in non-geared unit trusts that comply with specific regulations, allowing property development without breaching borrowing restrictions. ​

Related Party Considerations: When investing with related parties, the unit trust must meet criteria outlined in section 13.22C of the Superannuation Industry (Supervision) Act to avoid being classified as an in-house asset. ​

Key Considerations and Risks:

Complexity and Compliance: Property development within an SMSF is intricate and closely monitored by regulators. Non-compliance can lead to significant penalties. ​

Financial Risks: Development projects carry inherent risks, including cost overruns and market fluctuations, which can impact the SMSF's financial stability. ​

Professional Guidance: It's crucial to seek advice from professionals experienced in SMSF regulations and property development to ensure adherence to legal requirements and alignment with retirement objectives. ​ pwg.com.au

How ActOn Wealth Can Assist:

At ActOn Wealth, we offer comprehensive services to guide you through SMSF property development:

Strategic Planning: We help design investment strategies that align with your retirement goals and comply with SMSF regulations.​

Compliance Assurance: Our team ensures all activities meet legal requirements, minimizing the risk of penalties.​

Risk Management: We assess potential risks associated with property development and provide strategies to mitigate them.​

Collaboration with Experts: We coordinate with legal and property development professionals to facilitate a seamless investment process.​

Embarking on property development within an SMSF can be a viable strategy for wealth accumulation when executed correctly. ActOn Wealth is committed to providing the expertise and support necessary to navigate this complex process successfully.

SEE MORE ON SMSF


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Embarking on property development within an SMSF can be a viable strategy for wealth accumulation when executed correctly. ActOn Wealth is committed to providing the expertise and support necessary to navigate this complex process successfully.

Embarking on property development within an SMSF can be a viable strategy for wealth accumulation when executed correctly. ActOn Wealth is committed to providing the expertise and support necessary to navigate this complex process successfully.

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Questions
What are the investment options to grow SMSF wealth?

In Australia, there are various investment options available for you to self-manage a super fund. These include cash and term deposits, Australian and international shares, managed funds, ETFs, property, infrastructure and utilities, fixed income, alternative investments, and precious metals. SMSF trustees have the flexibility to choose investments that align with their goals and risk tolerance. Seeking professional advice is important to ensure regulatory compliance. Consult with our financial planners in Melbourne to explore the diverse investment opportunities available to you.

What is a self-managed superannuation fund? (SMSF)?

This is a private super fund regulated by the ATO, giving individuals control over their retirement savings. SMSFs offer a wide range of investment options, tax planning strategies, and potential cost advantages for larger balances. However, they come with strict regulations, legal responsibilities, and ongoing expenses. They are best suited for those with substantial super balances, financial knowledge, and the ability to manage their own investments. Professional advice is recommended before commencing down this path.

Do i need professional advice to set up and manage an SMSF?

This process can involve complex legal and financial responsibilities, and professional guidance can ensure compliance with regulations and optimise the benefits of the fund. Professionals such as SMSF specialists, accountants, financial advisors, and tax experts can assist with setting up the fund, developing an investment strategy, meeting legal obligations, and fulfilling reporting and compliance requirements. Their expertise helps make informed decisions and avoid costly mistakes.

What Others Say


★★★★★

Matt and Thomas did an online presentation for my work-place. They went through the process of buying and lending when it come's to first homes and answered any questions that came up. They made something difficult to understand, very easy to comprehend. It brought forward a lot of new information, especially for me, being a recent first-home buyer. An excellent presentation conducted by some very knowledgeable people! If you're unsure about where to start when buying a home, or even managing your finances, it would be silly not to speak to the team at ActOn Wealth.


Thalia Galea
Matt and Thomas did an online presentation for my work-place. They went through the process of buying and lending when it come's to first homes and answered any questions that came up. They made something difficult to understand, very easy to comprehend. It brought forward a lot of new information, especially for me, being a recent first-home buyer. An excellent presentation conducted by some very knowledgeable people! If you're unsure about where to start when buying a home, or even managing your finances, it would be silly not to speak to the team at ActOn Wealth.
★★★★★

I was given a lot off choices and advice on the pros/cons off how to invest with the best possible outcome for my situation and with the choice off being in charge off my own investing, but with there help. Matt understands as do I that there are NO guarantees on such a vulnerable market as it stands today. Very happy with the advice and outcome. I was very hesitant at first because I live in QLD and ActOn Wealth are in Melbourne Victoria, but being able to FaceTime and talk one on one makes life so much easier and they are always available on the day in most cases but like a lot off businesses, only time will tell how good they are. But at this stage and after going to there office I’m feeling very comfortable and would highly recommend.


Super Investment Advice
I was given a lot off choices and advice on the pros/cons off how to invest with the best possible outcome for my situation and with the choice off being in charge off my own investing, but with there help. Matt understands as do I that there are NO guarantees on such a vulnerable market as it stands today. Very happy with the advice and outcome. I was very hesitant at first because I live in QLD and ActOn Wealth are in Melbourne Victoria, but being able to FaceTime and talk one on one makes life so much easier and they are always available on the day in most cases but like a lot off businesses, only time will tell how good they are. But at this stage and after going to there office I’m feeling very comfortable and would highly recommend.
★★★★★

Blyth and his team at ActOn Wealth have been helping us manage our finances for many years now, and we have found them to be very professional in their approach. We can talk to all team members about any financial concerns we may have and our aspirations. ActOn Wealth have used their knowledge to help set up our home loan, investment property loans, insurances, SMSF, and they keep an eye on our cash flow to ensure that our day to day living expenses are covered. I highly recommend Blyth and his team for any financial assistance.


Highly Recommended
Blyth and his team at ActOn Wealth have been helping us manage our finances for many years now, and we have found them to be very professional in their approach. We can talk to all team members about any financial concerns we may have and our aspirations. ActOn Wealth have used their knowledge to help set up our home loan, investment property loans, insurances, SMSF, and they keep an eye on our cash flow to ensure that our day to day living expenses are covered. I highly recommend Blyth and his team for any financial assistance.

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