We’re now deep into the festive heat. Flights are booked. Kids are excited. And many SMSF trustees are quietly thinking:
“We’ve got that lovely SMSF-owned riverfront house in Noosa sitting empty… What’s the harm in staying there for a week?”
Stop. Right. There.
That “harmless” dip in the pool could dunk your SMSF into boiling water.
The Noosa trap — a hypothetical, but all too real
Imagine this:
Your SMSF owns a perfectly located residential property in Noosa — a stone’s throw from Hastings Street, overlooking the river, rented year-round to tourists at market rates.
But over Christmas, “the calendar is light”. So you — or your adult kids — decide to enjoy just a few nights there.
Congratulations, you’ve just triggered:
✔ A Sole Purpose Test fail (SIS Act s 62)
✔ Financial Assistance to members breach (s 65)
✔ In-house asset issues (ss 71 & 84)
✔ Potential Non-Arm’s Length Income (taxed at 45%)
✔ Exposure to ATO penalties personally payable
✔ Possible fund non-compliance (catastrophic tax outcomes)
All because of a few cocktails by the Noosa River.
“But nobody will know…”
Think again. SMSF audits increasingly require review of:
Airbnb calendars
Booking blackout periods
Bank statements & expense anomalies
Electronic access logs
Council & utilities billing patterns
Email trails (“we’ll stay at the SMSF place this weekend…”)
In 2025, digital breadcrumbs are everywhere.
Trustees who think they can slip under the radar in December often receive very different news in June.
Short-term indulgence → long-term pain
A one-week stay could lead to:
ACR reporting to the ATO
Penalty units ≈ thousands per trustee
Rectification directions forcing a sale
Disqualification as trustee
NALI taxed at 45%
In extreme cases: Fund declared non-complying and up to 45% of asset value gone overnight
That sunset drink on the Noosa deck? Could become the most expensive gin and tonic of your life.
The simple rule
If it’s residential — you can’t stay there.
Not you. Not your kids. Not your cousin visiting from Canada.
Not even for “just one night.”
If you genuinely want to enjoy that beautiful riverside home in retirement?
Then:
📌 Stop personal use immediately
📌 Await a proper condition of release
📌 Transfer the asset out of the SMSF at market value
📌 Then enjoy the river views guilt-free
Anything less? You’re playing backyard cricket with a ticking regulatory grenade.
The season’s warning
December delight should not become an SMSF audit disaster.
SMSF auditors will see the footprints in the sand. And the ATO will follow the trail.
Your SMSF is a retirement vehicle — not a holiday rewards program.
Protect what you’ve built.
Respect the rules.
And vacation somewhere your auditor won’t have to report on.
