PIPA has long argued that the government should legislate for property to be classed as a financial product when the purpose of sale is for investment. Ben Kingsley, chair of PIPA, told SMSF Adviser this would be a positive move, providing “better protection for trustees of SMSFs”.
Mr Kingsley said the push for increased regulation has been put in the “too hard basket” because the property purchasing space also encompasses other parties, such as owner occupiers, creating a grey area in defining ‘investment’.
However, he argues there is a simple purpose test which clearly categorises the nature of a property purchase.
“If you’re buying it for a capital gain or you’re buying it for a rental return, the purpose of your buying is investment,” Mr Kingsley said.
“So nice and clean, it’s very easy to define [and] it can separate people who are buying for owner occupied purposes. So we don’t think the government has an argument to say it’s a difficult thing to regulate.
“PIPA continues to lobby the government for such legislation, which would bring increased professionalism to the property investment space.”