Firm calls for increased property, SMSF regulation

Stricter regulations need to be introduced around SMSF property investment, according to an accounting and advisory firm.

Investors aiming to capitalise on the current strong property market are placing billions of dollars’ worth of residential property into SMSFs, William Buck stated.

“Considerable caution must be exercised around the inclusion of this asset class because its general investment characteristics are low income producing and unpredictable capital gains,” said William Buck’s wealth advisory director, Fausto Pastro.

“It is important that those advising investors regarding the purchase of residential property for inclusion in SMSFs are appropriately regulated,” he added.

Mr Pastro said banks need to be cautious when lending to investors who are planning to include residential property in their SMSFs.

“Residential property for many is an inappropriate asset to include in a SMSF. Investors should be very wary before making a final decision to put this type of asset into their fund,” he said.

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