Q: There has been much commentary of late about the philosophy of purchasing a dwelling through your SMSF and later acquiring it as a retirement abode. Having a positive sense of a reasonable strategy citing investment diversification, the aspects of purchasing an 'off-the-plan' apartment at today's value and CGT advantages in pension phase, the trustees of our fund decided on a site and are making moves toward a commitment to purchase. Then a rather large red flag appeared. Our SMSF administrator, although being very careful to point out that their opinion was not 'financial advice' as such, suggested that this strategy is not necessarily legal and to seek urgent advice before proceeding further.
We are well versed in the current regulations about personal use of an SMSF asset, arms-length transactions on sale, non recourse loans and trust setup using a registered company for purchase. Are there other hidden risks to the strategy, apart from the prospective rule changes that the Government may introduce in the future, that may scuttle our plans? My partner and I would hate to be in the position of not being able to procure the property after my retirement in four years time at age 60.