Welcome to my blog. This blog is dedicated to helping anyone who is currently in the midst of a liability issue. A few years ago, my daughter contracted listeria due to poorly packaged food. She, thankfully, was okay, but we still took her case to court. I want all families who have been affected by liability issues to understand their rights, so I decided to start this blog. My beautiful daughter is now 17 and preparing to start uni next year. I have three younger children as well and an amazing husband. Thank you for reading my blog. Please share my posts if they help you!
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If you are looking to buy a beach house that you may be able to live in following your retirement through your self-managed super fund (SMSF) it's important to keep your purchase within the law. Here is a guide to making sure your purchase is legal and does not affect the legality of your SMSF.
The property must be purchased with the intention of providing a retirement benefit
While you may like to contemplate the idea of moving to the beach when you retire, the reason ('sole purpose test') for buying the property needs to be that it will provide you funds for retirement including capital growth and/or rental returns. In order to support this decision, it can be useful to show the research that you have put into the decision to buy this particular property and keep this as part of the documentation for your SMSF. This could include comparisons with other properties or locations, as well as research reports into property investment which have informed your decision making.
It cannot be purchased from a related party
While the broad advice is that you can't purchase a property from a related party, in some circumstances you can buy a property from someone you know as long as the transaction is at an arm's length and you can show that this is a reasonable decision. As such it can be useful to use another party such as broker if you are approached with an offer to purchase a desirable property such as buying the back of an existing residential block, from a family member or close friend.
It cannot be rented or lived in by the SMSF members or their families
If you have bought a property in a location that you like to holiday in it can be a temptation to stay in the property when it is not rented to other parties. However, it's illegal to stay in or rent the property to a family member, as in this case the transaction has failed to stay at arm's length. Any friends who stay in the property also need to pay market rates for rent and not be offered 'mates rates' for rent.
If you are considering purchasing a property as part of your SMSF it can be a good idea to get legal advice. It can be a complex area to navigate and it can be important to understand your responsibility as a SMSF trustee.
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