Property Development
Property Development with SMSF
Property development with SMSF is a powerful way to increase the value of your retirement savings. With the right structure, your Self-Managed Super Fund can participate in property projects while staying compliant with ATO rules. At SMSF Depot, we offer expert support to help you develop property inside your fund without risking penalties.
Can You Develop Property in an SMSF?
Yes, SMSFs can engage in property development under certain conditions. However, strict rules apply, especially when loans, related parties, or commercial activities are involved.
Here are key guidelines:
The development must align with your SMSF investment strategy
The project cannot breach the sole purpose test
No development work should be done by related parties unless it’s done at market rates and under a valid contract
Any borrowings must follow Limited Recourse Borrowing Arrangement (LRBA) rules
What’s Allowed in SMSF Property Development?
To remain compliant with SMSF Australia regulations, trustees should:
Ensure all investments serve the sole purpose of retirement savings
Avoid personal or related-party use of the developed asset
Keep the property under the name of the SMSF or a bare trust
Ensure all construction, contracts, and valuations are done at arm’s length
SMSF Depot assists in preparing your investment strategy, structuring the ownership, and providing SMSF compliance oversight.
Risks of Non-Compliance in SMSF Property Development
Although the growth potential is high, property development within an SMSF comes with risks:
Breaching the sole purpose test
Triggering in-house asset rules
Related party transactions at non-market values
Loss of concessional tax benefits
Therefore, it’s essential to work with an SMSF specialist like SMSF Depot to avoid costly errors.
How SMSF Depot Supports Your Property Development Goals
At SMSF Depot, we provide end-to-end support for SMSF property development, including:
Reviewing or updating your SMSF investment strategy
Ensuring ATO compliance for related-party arrangements
Handling SMSF accounting, tax lodgement, and SMSF audit services
Structuring bare trusts for LRBA if borrowing is involved
Therefore, it’s essential to work with an SMSF specialist like SMSF Depot to avoid costly errors.
Can My SMSF Borrow to Fund Property Development?
Borrowing for construction is only allowed under strict conditions:
The LRBA must fund an asset that is single acquirable
Major structural changes or construction after acquisition may be prohibited
For complex scenarios, speak to SMSF Depot for clear guidance.
Frequently Asked Questions
Q: Can I build a house in my SMSF?
Yes, but only if it’s for investment purposes and not used by you or related parties.
Q: Can I develop land my SMSF already owns?
Possibly. It depends on the fund’s structure, how the land was acquired, and whether it involves borrowing or related-party construction.
Q: Is property development with SMSF tax-effective?
Yes, if compliant. Rental income and capital gains within an SMSF are often taxed at concessional rates.
Start Property Development with SMSF Depot Today
Property development can deliver strong returns within your Self-Managed Super Fund if done right. At SMSF Depot, we handle the structure, compliance, tax, and audit requirements so you can focus on building wealth.