Can I renovate a property owned through my SMSF?

Answer

If your SMSF owns the property outright, meaning your fund has not borrowed to buy the property, you can renovate or improve the property. However, if your fund has borrowed to buy the property (commonly referred to as a limited recourse borrowing arrangement) and the loan is still in place, you can only make improvements or renovations which do not change the character of the property. For example, a residential house that is converted into a restaurant, or a vacant block of land that is subdivided, resulting in multiple titles, would be considered changing the character of the property.

It is also important to note that if the renovations or improvements are not financed by the SMSF, but rather by the members themselves (or another entity), the value of the improvement or renovation will generally need to be recorded as a contribution made to the fund and will count against contribution caps.

We recommend that you speak with a financial adviser to help you decide if buying property through your super fund is right for you.

 

Important information

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It’s important to consider your particular circumstances and read the relevant Product Disclosure Statement or Terms and Conditions before deciding what’s right for you. This information hasn’t taken your circumstances into account.

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