DomaCom was issued an opinion by the ATO which suggests SMSF members can use some of their super money to jointly invest in a property with their children to help them acquire a house to live in.
The tax office has stated an investment by an SMSF in acquiring property held in a DomaCom sub-fund would not, in its opinion, contravene the SIS Act provided the SMSF and related parties acquired less than 50 per cent of the units in the sub-fund created after a successful public book build and the property was not acquired from a related party.
“For DomaCom, now in the middle of an IPO, this is a critical opinion from the ATO. We believe it is a very significant development that will drive growth in the company. For the first time, SMSF members can use some of their super money to invest in a property jointly with their children to help them acquire a house to live in,” DomaCom chief executive Arthur Naoumidis said.
“In addition to helping their children get into property, this opinion will allow SMSF trustees flexibility in respect of their residential property investments, including allowing SMSFs to co-invest with other SMSFs to create specialist accommodation for children with disabilities or special needs.”
DomaCom said it is continuing discussions with the ATO to raise the 50 per cent limit to 100 per cent.
“The fact is most SMSFs don’t have high enough balances for that to be an issue and DomaCom believes that, if successful, the limit will be increased over time as the housing affordability issue can only get bigger. Until this process is completed, investors will need to seek specific advice or acquire further ATO advice if they want to acquire more than 50 per cent of a specific sub-fund,” Mr Naoumidis said.
“What is important at this juncture is that the government recognises that there are commercial solutions to the issue of housing funding for those looking to buy property. Unlike some overseas models, where money is released from the pension to help people acquire their first property, this Australian innovation keeps the asset within the superannuation environment.”
SUBSCRIBE TO THE SMSF ADVISER BULLETIN
- 17 Aug 2017Industry questions ATO’s capacity for new reportingBy Miranda Brownlee
- 17 Aug 2017Qld succession law changes tipped to impact SMSFsBy Miranda Brownlee
- 16 Aug 2017Contribution limits restricting future balances, warns mid-tierBy Staff Reporter
- 16 Aug 2017SMSF firms underprepared for events-based reportingBy Miranda Brownlee
- 15 Aug 2017SMSF auditor disqualified for misconductBy Staff Reporter
- 15 Aug 2017Class gains market share in financial year resultsBy Staff Reporter
- view all
- Industry questions ATO’s capacity for new reporting
With events-based reporting set to generate huge amounts of data, concerns have been raised about whether the ATO’s systems will be able t...read more
- Contribution limits restricting future balances, warns mid-tier
Clients hoping to accumulate a superannuation balance of $1.6 million by age 65 will need to start taking full advantage of concessional con...read more
- SMSF firms underprepared for events-based reporting
A straw poll has revealed that the majority of SMSF firms currently feel their firm is not equipped to deal with the proposed events-based r...read more
- view all