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Can I live in a property owned by my SMSF

Can I live in a property owned by my self-managed super fund?

Monday 16th of December 2019
By: Victoria Kilby, Associate and Accredited Family Law Specialist, Coote Family Lawyers

Thank you for your high degree of professionalism and skill.

You can purchase residential property through your self-managed super fund (SMSF), however you cannot live in the property whilst you are still employed. 

If you purchase a property in the name of your SMSF whilst you are working, you can rent it out as an investment property, provided it is not rented to any member of the fund or relative of a member of the fund.

This applies to properties which are registered in the name of the SMSF and properties which are purchased using funds from a SMSF.   The restriction arises because of the “sole purpose” test – which is that the sole purpose of superannuation is intended to benefit your retirement, not to fund your living or financial circumstances prior to reaching retirement.

In some cases when parties separate, one person will remain living in the matrimonial home and the other person may need to find alternate accommodation, pending a final property settlement.   It is important that neither party move into a property owned by their SMSF, even as a short-term solution.

The Australian Taxation Office imposes strict regulations on SMSF properties, and a breach of the rules can lead to the fund being non-compliant, which may result in penalties or fines being imposed.

The laws relating to property owned by a SMSF are not always straightforward.  If you would like to discuss this or the impact of a separation and property settlement, contact Coote Family Lawyers, recognised as one of the top family law firms in Melbourne, on (03) 9804 0035 today.

 

 




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