“It's always good to work with the lawyers to get the acquisition right up front.”

Hurst said it is not unusual to have clients in a “rush” to buy property when they don’t have a particular entity established.

“They've found a dream property, they don't have the particular entity set up, and they've already made an offer on that property, or, in some cases, potentially paid a deposit,” Hurst said.

“So ideally, when you're talking to your clients, if they are indicating that they might want to purchase property through an SMSF, it’s best to try and get on the front foot and consider whether they do have the right entities now or certainly within enough time before they start to be in the position to make offers.”

Hurst continued that in some cases clients might not yet have an SMSF and the priority is to get one established as soon as possible if they are seriously looking to purchase a property in such a structure.

“If they've set up their SMSF, you have to find out if they have got funds in there to pay the deposit or are they going to be rushing and trying to roll funds over from perhaps a retail fund, or needing to make contributions, and also considering those further structures?” he said.

“Even where a client has an SMSF, if they're looking to borrow again, we need another layer of structures. You need a holding trust in place, ideally, before the client starts making offers on properties so when the client is ready to buy, they make an offer, and pay a deposit in the correct entity.”

Hurst continued that once the deposit has been paid, ideally by the SMSF, the contract is entered into by the fund’s trustee, however, there is potentially a holding trust entering into the contracts when there are limited recourse borrowing arrangements in place.

“These are the sort of conversations you should be having upfront with clients who are looking at jumping into property,” he said.

Hurst gave an example of a couple, Jonathon and Jenny Jones, who are members of the Jones’ family SMSF and directors and corporate trustee of JJ James Limited. The fund would like to purchase a commercial property as a non-LRBA purchase.

“The property title, if they are going ahead with the corporate trustee, should be entered into the name of JJ James Ltd, and there should be some mention of the super fund on that contract,” he said.

“There will also be some state-based nuances, which is why it's important to get legal advice to ensure that the contract does include the super fund, and is also entered into the name of the trustee. There are some other documents that might need to be submitted in other states to show that the purchase is being entered into the name of an SMSF.”