Can a SMSF buy off the plan property?
You can purchase a property off-the-plan using a self-managed super fund if the property meets the requirements of the Superannuation Industry (Supervision) Act, and in particular, where the SMSF is borrowing funds, that they meet the single acquirable asset rule of the limited recourse borrowing arrangement.
The ATO has clarified that a single limited recourse borrowing arrangement may be entered into to fund both the deposit and the balance of the contract price. However, where the property has multiple titles, for example, where the contract allows you to purchase additional parking spaces, or if you are buying land to build on under a separate building contract, these may not meet the single acquirable asset requirement, and you may be required to establish more than one bare trust and enter into an additional limited recourse borrowing arrangement.
Due to the additional risks that may apply to a SMSF purchase of property off the plan, a contract should not be entered into before seeking the appropriate legal advice from an experienced conveyancer, and financial advice from an accountant.