Criticism of SMSFs and property ‘ill-founded’
The debate that is “swirling” around SMSFs and residential property investment is not based on true figures, according to the SMSF Professionals’ Association of Australia (SPAA).
Evidence to date suggests SMSF trustees are cautious investors when it comes to property, SPAA’s head of education, Liz Ward, told SMSF Adviser’s sister publication, The Adviser.
“Firstly, much of the criticism of SMSF trustee investment in residential property is ill-founded,” Ms Ward said.
“Second, SPAA believes that once the true numbers are published, it will fundamentally show that the funds’ investment in property continues to be small in comparison to other investment classes.”
SMSF trustees have also been cautious when it comes to limited recourse borrowing arrangements, Ms Ward said. At 30 June 2013, ATO statistics show geared assets in SMSFs make up less than one half of one per cent of their total investments.
“New figures might change this investment outlook, but we remain confident that trustees will continue to invest prudently, especially where they enlist the support of an SMSF specialist,” Ms Ward said.
“Property is not an inappropriate investment per se... but it must be appropriate to the SMSF and consider the member’s circumstances, just like all investments, whether they are via an SMSF or personal investment decisions outside superannuation,” she concluded.
