SMSF property fears ‘overstated’: SPAA

Statistics released recently by the Australian Taxation Office (ATO) suggest industry fears about a “mad rush” into borrowing and property within SMSFs may be overstated, according to the SMSF Professionals’ Association of Australia (SPAA).

SMSF statistics for the June 2013 quarter indicate 0.5 per cent of SMSF investments have limited recourse borrowing arrangements (LRBAs) and that this investment category has grown at a rate of less than 2 per cent over the four quarters to 30 June 2013.

“Some problems with it may have been overstated,” Jordan George, SPAA’s senior manager, technical and policy, told SMSF Adviser.

“We’ve only seen the low growth in that investment type over the last year. I don’t think that those stats point to some of the rhetoric that is around borrowing and property for SMSFs.

“SPAA believes it’s worth noting that despite all the ‘talk’ around this issue, it’s still only a strategy used by a small minority of trustees.”

However, Mr George said SPAA acknowledges there are legitimate concerns within the sector related to spruiking and inappropriate advice, and the body supports the corporate regulator’s ongoing enforcement in this area.

SPAA is advocating that LRBAs become a licensed product under the Corporations Act to create more certainty around licensing arrangements, he said.

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