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All members of a self-managed super fund must be trustees and legislation only allows a maximum of four people in an SMSF. With a sole member fund you need a family member to sit alongside you. If this is not practical you can have a company as a trustee and be the only shareholder and director. There are many other reasons why a corporate trustee is recommended over individuals including:
<ol>
<li>
Administrative: When members come in or out (including death), there is a need to change bank account and other asset ownership details, which can be expensive and time-consuming and is not necessary with a company. </li>
<li>
Lump sum payments can only occur with a company trustee. </li>
<li>
Asset protection: While super is protected a pension may not be. But with a company a lump sum can be paid, which is protected in bankrupcy. </li>
<li>
Power of attorney: A legal personal representative can be put in place if the member is incapacitated without changing members’ details.</li>
<li>
Most banks require a corporate trustee if the fund is borrowing to purchase property.</li>
</ol>
With multiple members we would recommend that the SMSF and company be written in such a way as to give the directors and therefore memebers proportional voting rights to ensure people with higher balances are not taken advantage of by members with low balances, as the case is normally – one person, one vote.
Ken Raiss is a certified accountant and director of <a title="Chan &amp; Naylor " href="https://www.chan-naylor.com.au/" target="_self">Chan &amp; Naylor</a> national accounting firm. Chan &amp; Naylor offers a free five-minute question-and-answer session on its website under the<a href="https://www.chan-naylor.com.au/ask-the-experts/" target="_blank"> "Ask the Experts" section.</a>
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Why self-managed superannuation funds should have corporate trustees

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The federal government’s off again, on again super tax grab has likely done irreparable damage to public confidence in Australia’s superannuation system and simultaneously created the likelihood of a future lose-lose environment for up to 50% of self-managed super funds.  
Many more Australian super fund holders will be hit both in short and long term bull and bear markets than the government has conceded and the short term ‘cash grab’ nature of this proposed legislation has ridden roughshod over much needed long term vision which will short change Australia of future infrastructure investment.  
<a target="_blank" href="/news">Whilst the government has argued it will only target super funds with balances of $2 million or more</a>, funds with just a quarter of this figure may in better years accrue earnings revenue that easily exceeds the $100,000 cap and therefore be subject to the punitive higher rate of tax. Case in point is the significant positive upturn seen in the Australian share market which over the last 12 months has exceeded the 20% growth necessary for someone with an investment balance of $500,000 in their super to see a return of $100,000 or more if cashed out for retirement purposes or to pay out home loans.  
Furthermore, for someone hitting the age of 60 there is now a strong likelihood of living a further 30 years and given the cyclical nature of investments many self-funded pensioners could see themselves selling down portfolios when entering downward markets only to be hit with taxes to safeguard their retirement funds. Conversely when they buy back in and in the next cycle sell will be hit with further taxes.  
This means the possibility of four to six tax penalties over their remaining life.  
The government’s lack of foresight will create a lose-lose situation whereby people entering retirement on this figure will over the next 30 years likely see their retirement fund slashed with cyclical downward directions and and then when the market corrects itself they will get slugged again. The super cash grab tax will not just hurt retirees but also small business owners wanting to sell their businesses  
In the current regime small business concessions allow business owners to roll between $500,000 and $1,200,000 of profits from sale of business into superannuation. Given this will automatically be subject to potentially higher tax, business owners are likely to reconsider where they put their funds and look instead at more risky mechanisms than the current relative safety of their super. The hot spots for proposed legislative changes will now see the possibility of the business owner having to pay more tax if they invest through superannuation than if investing outside.  
This is completely at odds with the purpose of superannuation. Small business, property owners and self-funded retirees are the hardest hit again. The compulsory contributions increase from 9% to 12% over time, younger Australians who indubitably will accumulate substantial funds in their super will find themselves in the $500,000 target ‘super pool’ many years before retirement.  
With approximately 50% of self-managed super funds having a balance between $200,000 and $1,000,000 (many more than advertised) hard working Australians will be hit by this regressive impost over time. We could even see the hard work of many experts that have successfully pushed financial literacy into the school curriculum negatively impacted by the constant change in what should be long term and stable financial legislation.  
The industry has talked about a class divide, but the reality is that here we have a government setting itself up against small business, property investors and SMSF trustees as well as every day Australians. This is almost a silent push to get people out of super, which is ironic given it was the same party that introduced the compulsive scheme in the first instance.  
Equally concerning is the lack of government acknowledgement, let alone vision, for the potential of wide scale super fund investment in domestic infrastructure projects, with the heads of large super funds readily admitting that they have funds to invest but no dedicated infrastructure assets in which to invest thanks to the government’s short-sightedness.  
There is no shortage of capital to invest and as a properly managed tool for the future, super should be a mechanism for large scale capital investments that deliver tangible community benefits. For example super funds could be invested into a national first time buyer mortgage scheme which would help many Australians get onto the property ladder and over the long term bridge the growing property gap.  
We should be thinking in terms of abundance instead of scarcity, but sadly the government can’t see can’t see the forest from the trees.  
National Property, Business Tax Accounting and Wealth Advisory Group Chan &amp; Naylor supports the Business Council of Australia’s call to action for the current and future governments to end short-term political fixes in favour of substantial economic reform.
Ken Raiss is a certified accountant and director of <a target="_self" href="https://www.chan-naylor.com.au/" title="Chan &amp; Naylor " rel="nofollow">Chan &amp; Naylor</a> national accounting firm. Chan &amp; Naylor offers a free five-minute question-and-answer session on its website under the<a target="_blank" href="https://www.chan-naylor.com.au/ask-the-experts/" rel="nofollow"> "Ask the Experts" section.</a>
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Government's SMSF changes a lose-lose situation for many funds: Ken Raiss

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Since 2007 investors have been able to purchase property in super with debt, giving them the twin benefits of leverage and concessional tax rates. Another benefit of buying in super was that at age 60 no tax is payable on either rental income or capital gains. 
What has eluded the investor, however, was the ability to practically and efficiently add value by doing a renovation. There was confusion by both the profession and the ATO in what was possible and how it is funded. 
With a stroke of the pen the ATO has clarified and simplified these elusive questions.
With the release of SMSFR 2012/1 the ATO has defined three critical areas and clearly defined what constitutes a renovation. 
In summary the ATO has confirmed that a self-managed super fund (SMSF) can borrow money to fund a cosmetic renovation, e.g. kitchen, bathroom, flooring etc. If the renovation is structural, e.g. if it moves internal walls, then the funds must come from internal SMSF cash, not borrowings. 
More technically this ruling clarifies what is a:
<ol>
<li>Repair</li>
<li>Improvement</li>
<li>Change to the single acquirable asset (SAA) </li>
</ol>
Specifically:
<ol start="1">
<li>Cosmetic renovation is identified as a repair by the ATO and so can be funded with debt. For tax purposes a scrapping schedule and a depreciation schedule would be completed. These costs cannot be expensed, so the use of the word repair can be misleading, but ATO has chosen to define repair differently for superannuation purposes and for tax. </li>
<li>Improvement such as moving internal walls, the addition of a granny flat, second story, swimming pool etc which does not change what the SAA is (i.e., it is still a single dwelling) can be done with internal SMSF cash but not debt. </li>
<li>A substantial improvement that alters the SAA to a point where what you end up with is not what you started with eg single dwelling into a duplex, land to land and dwelling, etc., cannot be done while there is a loan on the property/land. If there if no debt then it can be done but it must be funded by internal cash. </li>
</ol>
Note: properly documented and financed off the plan or a single contract that includes the land purchase and dwelling construction where in both cases a deposit is paid and then final payment is made on completion is OK. 
Unfortunately the ATO has also confirmed that an existing asset in super with no debt cannot have a loan facility created against it. 
Please note that you need to have your own SMSF to purchase property direct with debt as your retail/industry fund will not oblige.
Ken Raiss is a certified accountant and director of <a title="Chan &amp; Naylor " href="https://www.chan-naylor.com.au/" target="_self">Chan &amp; Naylor</a> national accounting firm. Ken’s experience lies in working with large publically listed multi-national companies, which gives Ken excellent insight into international market trends. Ken specialises in educating “mum and dad” property investors and small business owners with advice on wealth creation, asset protection, taxation, superannuation and compliance. Chan &amp; Naylor offers a free five-minute question-and-answer session on its website under the<a href="https://www.chan-naylor.com.au/ask-the-experts/" target="_blank"> "Ask the Experts" section.</a>
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Changes to SMSF legislation will benefit property investors: Ken Raiss

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How to best use your self-managed super fund to invest in property
How can the astute property investor combine the benefits of low tax in super and the benefits of leverage?
Superannuation’s prime responsibility is to provide a member with retirement income. With increasing regularity people are seeing their superannuation funds declining either from poor investments or spiralling costs. To get more control many people are moving to self-managed superannuation.
Since mid-2007 self-managed superannuation funds have had the ability to invest in property, with bank debt.  Many see investing in property as less volatile, unlikely to reduce in value over time and importantly as an asset that is in limited supply and one that everyone needs. Thus market values (capital and rents) are more likely to grow over time.
Property in a SMSF allows investors to accumulate property using bank debt that will be tax free in pension stage for both rental income and any capital gains on sale. At the same time, it allows the full benefits of negative gearing at the individual’s marginal tax rates while still working. This is like having multiple tax-free principal places of residences. Who says you can’t have your cake and eat it too?
Many people argue that with leveraged property in a super fund there is less likelihood of an overall loss of superannuation, as the ability to borrow to increase the asset size allows more funds to be accumulated and grow in a less volatile asset class than maybe shares.
 
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Four key steps to maximising your property investment through your SMSF
 
With the ability to negatively gear property in superannuation while still at work against your personal tax, more people are looking at this strategy to improve their lifestyle in retirement.   This ability to buy property, which will be tax free in your retirement, can greatly boost your future income. However, many people take shortcuts that reduce the upside of this strategy and unfortunately,  in some cases, unintended costs are triggered. To maximise the strategy, four key steps are necessary.
<ol>
<li>
Talk to your specialist SMSF accountant or financial planner to ensure the property you are looking at is allowable. In summary, borrowings can be used to purchase, repair, and fund interest expenses. Cosmetic renovations (not an improvement) are permitted with borrowings, and while you can improve a property by adding floor space, granny flat, etc, this must be done using SMSF cash. Off-the-plan purchases are allowable, but not the purchase of land and the subsequent construction of the building. During this talk you can discuss the rollover from other super funds and any insurances etc., you may need.</li>
<li>
Get pre-approved finance. In many instances the banks will require a financial planner to sign off on your SMSF strategy, but this is normally a relatively simple thing. You may need to top up your super if you do not have sufficient deposit etc., but you can lend money to your SMSF from say cash or equity from outside super. As this is not a super contribution, there is no limit on the amount, and it can be repaid prior to retirement.</li>
<li>After steps one and two are complete you can then put in place the paperwork. Caution is needed, as not all suppliers of the required documents are equally skilled. If you are lending money to your SMSF then you need these documents, and it is also advisable to complete additional documents as in many states a future second stamp duty on the property may be payable if all required documents are not completed.</li>
<li>Now the fun stuff: go out and secure the property.</li>
</ol>
 
The above may look intimidating, but it is just administration that your specialty advisor will help you with and for most people, it’s no more daunting than the process of purchasing the property; it’s simply just some “extra paperwork”. The ability to leverage property in super can be very beneficial, but ensure you follow these relatively simple rules to maximise your benefits.
 
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How to use your super to buy a tax-free investment property
 
This tax pearler is normally associated with the family home, but the federal government eliminated all taxation within superannuation when in the pension stage many years ago.  With the ability to now borrow in superannuation, the astute investor can now leverage his or her superannuation and borrow to purchase property that will become tax free.
While working and paying tax the investor can negatively gear a good capital growth property out of his or her pre-tax income in the same way as if it was purchased outside super. The 9% superannuation guarantee can even be used to fund the negative gearing. The big difference occurs after age 60 when the property in super will attract no tax on rental income or capital gains on sale. Payments from the super fund to the investor are also tax free, and in fact it does not even need to be itemised in the individual’s personal tax return. Outside of super the cashflows would be fully taxable on both the rental stream and any capital gains. This superannuation treatment allows the individual to effectively have the taxation benefits as if they had multiple family homes.
Many people are sceptical about investing in super and argue they are too young, the rules may change and it is too confusing. All valid concerns, but the primary aim of all investors is to make money, and this task is made easier if no taxes are paid. An investment property needs time to do “its thing”, i.e. capital growth, so even the younger generations can benefit. How good would it be to have some of your investments in the “pay no taxes” basket?
This strategy can in some instances apply even before age 60 and has the added benefits of creating an additional land tax threshold and improved asset protection. The benefits are many.
Ken Raiss is a certified accountant and director of <a target="_self" href="https://www.chan-naylor.com.au/" title="Chan &amp; Naylor ">Chan &amp; Naylor</a> national accounting firm. Ken’s experience lies in working with large publically listed multi-national companies, which gives Ken excellent insight into international market trends. Ken specialises in educating “mum and dad” property investors and small business owners with advice on wealth creation, asset protection, taxation, superannuation and compliance. 
These articles appeared on Property Observer throughout 2012.
 
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Investing a property through your self-managed super fund: Three of the best of Ken Raiss

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Amid increasing pressure on trustees of self-managed super funds (SMSFs) to keep pace with the steady stream of quiet pronouncements from the ATO, we turn the spotlight on some overlooked SMSF guidelines in need of urgent reform in 2013. As a relatively young but rapidly evolving model, SMSF compliance guidelines contain more than their fair share of unnecessary and arbitrary rules. Some of these are discriminatory, lack logic or simply make the process of providing for independent retirement unnecessarily difficult. Chan &amp; Naylor has compiled the following list of 10 SMSF rules that themselves either require retirement or modification. The ATO must broaden the net of reform to ensure arbitrary SMSF ruling is afforded urgent review and the best interests of Australian investors are put first. 1) An SMSF must have no more than four members.
SMSFs are most often used to provide for retirement income for all family members, yet four trustee positions would not be enough to cater for the average Australian household. The figure should respond to the nation’s needs as opposed to forcing families to either leave family members out of the SMSF or pay to set up an additional fund. 2) An SMSF cannot borrow money to pay for improvements to a single acquirable asset.
Should a trustee require money to renovate a property, it cannot be loaned in an SMSF because it is considered to increase risk, though trustees are still allowed to borrow money to purchase that property or asset in an SMSF. 3) A person must pay to set up separate holding trusts per single acquirable asset with debt.
Instead of adding acquirable assets with debt into the same trust structure, trustees must pay to set up another. 4) Life insurance (which is tax-deductable in super) cannot be moved from an individual name to a self-managed superfund unless the existing policy is cancelled and reissued.
Those who experience a change in circumstances while doing so, such as entering a new age group or different health, could find their new policy does not provide the same cover as their previous insurance policy, or worse still, cannot be re-written. 5) If a person is insured in super, they can only claim tax deductions for TDP (total and permanent disability) provided they are unable to work in any occupation. 
This should also apply for a person’s own occupation. 6) It is prohibited to buy residential property or unlisted shares through an SMSF from a related party (wife, family member, etc.), even if supported with a registered valuation.
It is, however, acceptable to do the same with commercial property or shares. As long as the sole purpose test is passed there should be no limitation on from whom the asset is purchased if executed at arm’s length. 7) After the age of 65, a trustee is no longer entitled to the three-year average contribution.
This is age discriminatory. Anybody should be able to benefit from the three-year average contribution entitlement regardless of age. 8) Once a trustee reaches the age of 75, he or she may no longer contribute the full super contribution limit of $25,000 per annum.
This rule is discriminatory, especially as more Australians are both living and working for longer. 9) SMSFs must pay for manual amendments with each change to the SIS Act.
However, the big superfunds, covered by their associations, adopt legislation changes automatically. An SMSF deed, through legislation, should automatically pick up any changes to the SIS Act. 10) Trustees can suffer destructive penalties of up to 93% on over-contributions.
Excessive penalties should be axed for genuine errors.
Ken Raiss is a certified accountant and director of <a target="_self" href="https://www.chan-naylor.com.au/" title="Chan &amp; Naylor ">Chan &amp; Naylor</a> national accounting firm. Chan &amp; Naylor offers a free five-minute question-and-answer session on its website under the<a target="_blank" href="https://www.chan-naylor.com.au/ask-the-experts/"> "Ask the Experts" section.</a>
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The 10 SMSF rules that need urgent reform: Ken Raiss

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With the ability to negatively gear property in superannuation while still at work against your personal tax, more people are looking at this strategy to improve their lifestyle in retirement.   This ability to buy property, which will be tax free in your retirement, can greatly boost your future income. However, many people take shortcuts that reduce the upside of this strategy and unfortunately,  in some cases, unintended costs are triggered. To maximise the strategy, four key steps are necessary.
<ol>
<li>
Talk to your specialist SMSF accountant or financial planner to ensure the property you are looking at is allowable. In summary, borrowings can be used to purchase, repair, and fund interest expenses. Cosmetic renovations (not an improvement) are permitted with borrowings, and while you can improve a property by adding floor space, granny flat, etc, this must be done using SMSF cash. Off-the-plan purchases are allowable, but not the purchase of land and the subsequent construction of the building. During this talk you can discuss the rollover from other super funds and any insurances etc., you may need.</li>
<li>
Get pre-approved finance. In many instances the banks will require a financial planner to sign off on your SMSF strategy, but this is normally a relatively simple thing. You may need to top up your super if you do not have sufficient deposit etc., but you can lend money to your SMSF from say cash or equity from outside super. As this is not a super contribution, there is no limit on the amount, and it can be repaid prior to retirement.</li>
<li>After steps one and two are complete you can then put in place the paperwork. Caution is needed, as not all suppliers of the required documents are equally skilled. If you are lending money to your SMSF then you need these documents, and it is also advisable to complete additional documents as in many states a future second stamp duty on the property may be payable if all required documents are not completed.</li>
<li>Now the fun stuff: go out and secure the property.</li>
</ol>
 
The above may look intimidating, but it is just administration that your specialty advisor will help you with and for most people, it’s no more daunting than the process of purchasing the property; it’s simply just some “extra paperwork”. The ability to leverage property in super can be very beneficial, but ensure you follow these relatively simple rules to maximise your benefits.
Ken Raiss is a certified accountant and director of <a title="Chan &amp; Naylor " href="https://www.chan-naylor.com.au/" target="_self">Chan &amp; Naylor</a> national accounting firm. Chan &amp; Naylor offers a free five-minute question-and-answer session on its website under the<a href="https://www.chan-naylor.com.au/ask-the-experts/" target="_blank"> "Ask the Experts" section.</a>
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Four key steps to maximising your property investment through your SMSF

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With personal finances left looking fragile after the annual Christmas spending splurge, I thought it best to offer a list of simple strategies that can help Australians improve their financial fitness in 2013. 
If done properly, this includes assessing all aspects of personal finances, including strategies to boost retirement investments, such as including property and super, savings, a review of insurance policies, staying ahead of tax obligations and making an effort to improve financial literacy as more and more Australians take more control of planning their financial future.
1. Maximise the potential of any investment properties. Renovations to an existing property can reap huge rewards in the long run, with even the addition of air-conditioning dramatically increasing a property’s yield in terms of the amount you are able to receive in rent. Also, holding an investment property within a self-managed super fund trust is one of the most tax-efficient ways of managing these types of assets.
2. Ensure your property agents cover all property investment expenses (excluding interest). After all, you are paying them. This will greatly reduce your accountant’s costs and reduce your administration, as the agent will give you monthly and annual statements showing all income and expenses and will attach relevant invoices to each statement for your compliance needs.
3. Ensure loans are properly structured. Interest rates are near all-time lows, so while this is not great for savers, it is terrific for borrowers, who should ensure that their loans are properly structured and rates are in line with the competitive market rate. Many borrowers have not been given access to what is called the professional discount, although most are eligible. This potential  0.7% rate decrease applied to pay down a loan reduces the average loan by over $2,300 per year which equates to an overall saving of over $104,000 and reduces the term by nearly 6.5 years. The use of honeymoon credit card rates can also be very beneficial to enhance the faster payment of credit card debt while not increasing actual cash requirements.
4. Be aware of tax deductions. The use of a specialist property accountant will be able to show you all the legal tax deductions available to you, including the proper set-up of loans and the use of trusts for the astute property investor. Many investors forget to claim depreciation, which is a non-cash expense relating to the wear and tear of the building and fixtures and fittings. When doing a renovation, you should also prepare a scrapping schedule, which puts a value on everything you rip out and throw away. The taxman will pay you for your junk via an expense in the year of renovation and then allow depreciation on the new work. Remember depreciation and scrapping schedules must be prepared by a qualified quantity surveyor.
5. Ensure your will and enduring power of attorney are up to date. We have all heard of the horror stories of the wrong people getting your assets or, even worse, the government. Wills are a way to protect family wealth, and the common will, where assets are bequeathed to your children or surviving spouse, can have dire consequences if the receiver becomes bankrupt, has a family dispute, or has other medical issues. For many, a better alternative is required and therefore a different type of will is needed. This is normally referred to as a testamentary will. In this scenario, your will makes provision for your assets (such as property) to go to a trust set up after your death and you have your loved ones in control of the trust. This protects the assets from divorce, bankruptcy and taxes minors at adult tax rates and not the dreaded 66% on income generated from a normal death distribution. An enduring power of attorney (EPOA) is also recommended as the will does not take effect until death. If in a coma, access to bank accounts or the ability to sell assets for your medical treatment may be delayed or stopped without the EPOA. Remember your will only looks after what you own in your name and does not cover your superannuation or trust assets. Other documentation is required for these.
6. Consolidate super. Many of us have held a number of super funds over our working lives. These various superannuation balances can be quickly identified by visiting <a href="https://www.findmysuper.com.au/">www.findmysuper.com.au</a>, then consolidating these funds within one appropriate fund will ensure that you have the maximum amount of capital working, while cutting out multiple administrative fees, reducing costs and increasing retirement benefits.
7. Have your life insurance in your superannuation. Life insurance in this day and age is a necessity. However, it must be purchased with after-tax dollars when held in your name, yet if life insurance is held in super, payment is tax-deductible, resulting in large savings. Payments can be funded either out of your super guarantee (9%), improving your weekly cashflow, or as an additional salary sacrifice, which is tax deductible.
8. Consider moving your super into pension stage. The trigger for this is your age, not whether you are working. It is understandable that for any number of reasons many of us are happy or need to continue working slightly longer than traditionally we would have in previous times. Many super trusts allow the option to trigger retirement in super while you are still working (a simple deed amendment will allow this if not currently available). The benefit of this strategy is that your super fund will no longer be taxed on income or capital gains from your pension balances. You will need to draw an annual pension, but this can be re-contributed if not needed. In your hands, the pension will not be taxed if you are over 60 and taxed at your marginal tax rates less 15% if you are between 55 and 60, greatly increasing cashflow.
9. Ensure tax returns are up to date. The ATO is increasingly clamping down on late tax returns, but tax office penalties should not be the only incentive to avoiding tardiness. Delaying your income tax returns can add additional costs and deprive you of funds if a refund is expected. Even if you are required to pay additional tax, it is recommended to start early and withhold lodgment until your due date. Working through a registered tax agent can allow you up until May 15 in the next year for lodgment.
10. Savings can be made by reviewing and consolidating existing insurance policies. Many Australians do not consider changing their existing insurance policies for a better deal, normally because they are concerned that they will need to undergo a new medical examination, which may impact costs or benefits of that policy. However, if you have undergone a medical in the past five years, in most cases there is no requirement to undergo another if there is no loading applicable and the same amounts are carried to a new insurer who in turn may be able to offer you a more competitive deal. There could also be benefits in having different policies with the one provider so as to source discounts.
11. Invest in your own financial education and literacy. There is an increasing amount of scrutiny on the financial services industry and the big super funds in terms of the value of their advice and returns in recent years. Many Australians are now opting for a more independent route in order to maximise their future financial wellbeing. A self-managed super fund may be the right option for you. Talk to a specialist SMSF adviser, who can not only discuss the normal areas such as insurance and investment plans but also understands the law and tax applicable to these funds. Many people are now using their SMSFs to purchase property with debt, but if poorly executed, this brings unintended penalties so work with a specialist to maximise your returns. Other useful sources of information include joining specialist associations such as the Australian SMSF Members Association, which is a voice for members and not driven for the benefit of the profession.
There is a lot of value in investing in improving financial literacy. Not knowing is like throwing money down the drain; as many of these steps show, simply altering the way existing finances are structured can dramatically increase your cashflow, giving you that added flexibility to generate more wealth, whether that be through property or other investments.
Ken Raiss is a certified accountant and director of <a title="Chan &amp; Naylor " href="https://www.chan-naylor.com.au/" target="_self">Chan &amp; Naylor</a> national accounting firm. Ken’s experience lies in working with large publically listed multi-national companies, which gives Ken excellent insight into international market trends. Ken specialises in educating “mum and dad” property investors and small business owners with advice on wealth creation, asset protection, taxation, superannuation and compliance.
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Maximise your investment properties and 10 other ways to improve your financial fitness in 2013: Ken Raiss

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GUEST OBSERVATION
Recently a client emailed Chan &amp; Naylor managing director Ken Raiss, with a particular question to do with purchasing a property in super. 
Hi Ken,
I hope you are well!
I am just writing regarding a question for bricks and mortar and hoping you can respond.
My superannuation is presently with an industry fund.  I seek your advice as to investing my superannuation in buying a property in lieu of losing accounting fees, etc, while unemployed.
Thank you.
Ken Raiss' answer on the next page. Please click below.
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GUEST OBSERVATION
Purchasing a property in super needs to be a strategic decision depending on the size of your superannuation balance, your tolerance to risk and need to accommodate any pension payments.
You would also need to set up your own self-managed super fund (SMSF) which can have a maximum of four members.
The ability to borrow in superannuation, together with the lower tax rates, has made it very attractive for many to purchase property in super. When borrowing the banks would normally take into account rental income and your super guarantee contributions (up from 9.25% to 9.5% 1 July 2014) and we find that banks normally lend on an 80% loan to valuation ratio, but at a slightly higher interest rate then if outside of super. There needs to be a formal loan agreement and you can even lend to your own super from either cash or from say an equity balance using appropriate loan documentation.
The costs of set up will include the SMSF plus a holding trust (as you cannot buy directly within the SMSF if there is debt/security on that property) and  loan documentation. The annual costs of running an SMSF need to be compared to the costs of your existing funds which are not always readily apparent when looking at your statement. Having said that the ability to borrow greatly increases the size of your asset which grows (hopefully) while the debt stays constant. The ability to pay down debt in super is more effective as the 15% income tax rates in super is much lower than what most people pay on their wages. For many therefore the costs of setting up and running an SMSF is more than made up by being able to leverage within super.
If you become unemployed your SMSF would still need to make repayment. Without any contributions from yourself, the SMSF would need to rely on internal cash reserves. The same issue would arise if the property was purchased outside of super as you would still need to make repayments.
There are some other restrictions within super when purchasing a property. You cannot refinance and borrow against the equity and you cannot redevelop the site while there is still an outstanding debt. You can, however, do cosmetic renovations and small improvements.
We recommend a five stage process when looking at purchasing property in super:
<ol>
<li>Speak to a qualified specialist property accountant and or financial planner to confirm that the type of property you are contemplating is allowable.</li>
<li>Speak to a qualified financial planner for advise on the rollover of funds from industry/retail funds to the SMSF as this may trigger CGT and you may lose insurance coverage.</li>
<li>Seek in principle loan approval</li>
<li>Complete the relevant paperwork and set up of the SMSF and holding trust including any rollovers as well as completing an SMSF Strategy</li>
<li>Go shopping for the property. If you purchase first without setting up the appropriate structures you cannot then “on sell” as an SMSF is prohibited from purchasing a residential property off a member.</li>
</ol>
Kind regards,
Ken
Ken Raiss is managing director of <a href="https://www.chan-naylor.com.au/" target="_blank">Chan &amp; Naylor</a>, property, business, tax accounting and SMSF specialists.
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How do I buy a property with my super while unemployed?

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Should Tony Abbott’s party come to power in September then it needs to begin day one with an extensive review of the national ledger and a clear position on how it will encourage Australians to prepare for their future.
The country right now is no different to a household or business in financial difficulty.
A freshly elected government in September must set about clearly understanding Australia’s ‘baseline’ position to ensure that fiscal strategies are not ill-addressed or threaten the safety-net for the most vulnerable.
I'm supportive of the opposition’s renewed commitment to scrapping both the mineral and carbon taxes.
Doing so will help reduce pressure on household family budgets, improve business confidence and therefore improve employment prospects and ensure Australia’s competitive advantage in its export deliverable.
Whilst delaying an increase in compulsory super contributions by two years is unfortunate, this is a ‘soft option’ to give Australian business some reprieve.
Australians should still be encouraged to contribute more towards their super.  
Because the compulsory super option may be shelved for now, wages as a result may grow quicker over the next 24 months and with this the opportunity for Australians to consider other options for contributing more towards their super, which the future government must support.
In considering the current government’s initiative to encourage senior Australians to downsize their homes, I support this concession in principle but believe that the rules governing the initiative (notably the 25 year home ownership and 10 year tax concession cap) should be more streamlined and would benefit from using the same guidelines of existing main residence exemption rules.  
People are living longer and the tax rules and benefits need to reflect the growing uncertainty that comes with old age and need for greater flexibility.
Ken Raiss is a certified accountant and director of <a rel="nofollow" title="Chan &amp; Naylor " href="https://www.chan-naylor.com.au/" target="_self">Chan &amp; Naylor</a> national accounting firm. Chan &amp; Naylor offers a free five-minute question-and-answer session on its website under the<a rel="nofollow" href="https://www.chan-naylor.com.au/ask-the-experts/" target="_blank"> "Ask the Experts" section.</a>
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Australians should still be encouraged to contribute more towards their super: Ken Raiss

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With an economy that is 13% bigger than before the recent GFC and having enjoyed revenue growth of 7%, the federal government’s crying over ‘powerful global forces’ conspiring against its surplus promise is crocodile tears.
These figures would be the envy of any Australian household or business.
There has been positive actions such as increasing the concessional super contributions for people over 60 and removing the draconian excess contributions tax, however where this federal budget has succeeded most is in creating additional unnecessary bureaucracy.
The introduction of a levy to fund a super committee to look at a committee to do what the government should be doing is ill-considered and wasteful.
Instead, I would have preferred to see more expenditure (than the $5 million) on improving the nation’s financial literacy.
The $112.4 million set aside to support Australians downsizing their homes is also a positive outcome; however the 10-year exemption rules and other limitations are another example of a good policy hamstrung with administrative compliance or unnecessary complications.
On superannuation, the government’s initiative on taxing super fund earnings in retirement over $100,000 will mean that business retirees potentially pay more tax on investments in super than outside of super, which fundamentally defeats the purpose of an effective superannuation system.  
The federal budget should be setting the nation up for hope and increased confidence rather than disillusionment.
In response to this budget I would like to see a Coalition plan that helps drag Australia out of gloom and doom, which ensures the safety of our AAA credit status and encourages small to medium as well as big business to expand and grow through innovation and employing aspirational Australians.
Ken Raiss is a certified accountant and director of <a rel="nofollow" title="Chan &amp; Naylor " href="https://www.chan-naylor.com.au/" target="_self">Chan &amp; Naylor</a> national accounting firm.
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The budget should be about setting Australia up for hope and confidence: Ken Raiss

Buyers considering a residence at boutique Gordon townhouse development <a href="https://www.apartments.com.au/new-townhouses/lume-gordon-43-47-dumaresq-street-gordon-nsw-2072">Lume</a>&nbsp;now have another reason to bring forward their decision.

For a limited time, purchasers of a residence at Lume will receive a BMW iX3 50 electric SUV, valued at more than $120,000, as part of their purchase. The offer is designed to add value for buyers while complementing the lifestyle envisioned for the architecturally designed Upper North Shore development.

Scott Timmins, Development Manager at <a href="https://www.apartments.com.au/developers/winim">WINIM</a>, said the partnership was created to provide buyers with a compelling reason to act.

"In today's market, buyers need a compelling reason to act now, and the BMW partnership was designed to create that catalyst. We wanted to add genuine value for our future purchasers. Choosing the all-electric BMW iX3 50 also reflects the values behind LUME, forward-thinking design, innovation and a more sustainable way of living. It's a premium incentive that complements the lifestyle our buyers aspire to and rewards those who commit early."

[smartcode_project:default project_id=7354 project_image_fid=374893]

Delivered by WINIM in partnership with Burtonwood Investment Partners, Lume comprises 14 architecturally designed two, three and four-bedroom townhomes created for families seeking the space of a freestanding house with the ease of modern, low-maintenance living.

The three-storey residences, designed by award-winning architecture practice <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a>, have been tailored for families and multi-generational living, featuring private internal lifts, flexible lower-level spaces, generous open-plan living and entertaining areas, media rooms, and landscaped outdoor spaces with custom outdoor kitchens.&nbsp;

Inside, engineered oak flooring, bespoke dining joinery with integrated wine fridges and backlit bars, sculptural porcelain bathrooms, Parisi freestanding baths and Astra Walker tapware create interiors that balance functionality with refined finishes.

Each townhome has been designed to combine generous internal spaces with sustainability initiatives such as EV charging infrastructure, while <a href="https://www.apartments.com.au/landscape-architect/arcadia-landscape-architecture">Arcadia</a>'s landscaped communal areas, centred around a restored creek line and native planting, encourage residents to connect with nature and spend more time outdoors.

[smartcode_project:default project_id=7354 project_image_fid=269527]

Rothelowman's Gary Tsui said the architecture was conceived to respond carefully to its Upper North Shore setting.

"Our vision was to create elegant, uplifting homes that draw on and positively contribute to the local character through meticulously considered design and an interaction with the surroundings."

The communal landscape has been designed as more than an open space between homes. Arcadia's Ben Newell and Kate Phillips said the adjoining reserve provided an opportunity to create a distinctive natural retreat for residents.

"Just as waterways carve their way through Ku-ring-gai's landscape, a raised boardwalk weaves through the reserve, connecting the homes to this tranquil oasis."

[smartcode_project:default project_id=7354 project_image_fid=374892]

Located just 300 metres from <a href="https://www.apartments.com.au/developments/gordon-nsw-2072">Gordon</a> Village and Gordon railway station, Lume offers convenient access to Sydney's CBD while placing residents close to some of the North Shore's leading schools, including Ravenswood, Pymble Ladies' College and Knox Grammar. Lane Cove National Park, Gordon Golf Club and a range of cafés and restaurants further reinforce the family-focused lifestyle on offer, with the BMW iX3 50 complementing everything from local trips around Gordon to weekend drives and city commutes.

Construction is underway with completion expected in mid-2027.

[smartcode_project_cta:default project_id=7354]

Joel Robinson

Boutique Gordon townhomes now come with a BMW iX3 50

Two apartments have sold for more than $10 million at EADE Byron Bay, setting some of the highest apartment prices ever achieved in the coastal town and underlining the growing appetite for luxury beachfront apartments in Australia's most popular coastal locations.

The $210 million project by Vitale Property Group has now secured more than $70 million in sales, led by residences that changed hands for $12.75 million and $11.75 million.

The record-breaking transactions reinforce the shift occurring in Byron Bay's premium property market, where affluent downsizers and lifestyle buyers are increasingly opting for high-end apartments over large beachfront homes.

<a href="https://www.apartments.com.au/new-apartments/eade-byron-bay-29-shirley-street-byron-bay-nsw-2481">EADE Byron Bay</a> occupies a rare 6,000 sqm absolute beachfront site on the corner of Shirley and Milton Streets overlooking Main Beach and The Wreck surf break, just 350 metres from Byron Bay's town centre.

The 25-residence development is the first beachfront apartment project approved in Byron Bay in more than a decade and is currently under construction, with completion expected in May 2027.

[smartcode_project:default project_id=145590 project_image_fid=359521]

The project has attracted a mix of local Byron Shire residents downsizing from larger homes, alongside interstate buyers from Sydney, Melbourne and Brisbane seeking a permanent coastal lifestyle without compromising on space.

Designed by <a href="https://www.apartments.com.au/architects/hayball">Hayball</a> and with interiors by <a href="https://www.apartments.com.au/interior-designers/alexander-co">Alexander &amp; Co</a>, EADE comprises&nbsp;10 garden apartments ranging from 284 sqm to 622 sqm, nine with private pools, five full-floor apartments and 10 rooftop residences with private plunge pools, expansive outdoor entertaining areas and uninterrupted ocean views.

[smartcode_project:default project_id=145590 project_image_fid=359527]

<a href="https://www.apartments.com.au/developers/vitale-property-group">Vitale Property Group</a> Managing Partner Chris Vitale said the project's combination of scale, location and limited future supply was driving buyer demand.

"There isn't another beachfront holding in Byron Bay of this size and position that could be developed again," Vitale said.

"Buyers are responding to the scarcity and the irreplaceability of a site of this calibre and to floorplans they can't find elsewhere in the market.

"We are seeing buyers place significant value on quality, space, design, resort-style amenities and the rarity of the location. The sales achieved to date demonstrate that discerning purchasers recognise the long-term significance of what is being created at EADE Byron Bay.

"Many are coming from larger homes in the Byron region, or from Sydney, Melbourne and Brisbane, and are after the space, security and convenience, without the upkeep of a house."

&nbsp;

[smartcode_project:default project_id=145590 project_image_fid=359523]

The Byron Bay project follows Vitale Property Group's delivery of the Mondrian Hotel and Private Residences at Burleigh Heads, with EADE continuing the developer's focus on luxury coastal developments.

Residents will have access to a resort-style swimming pool, gymnasium, sauna, cold plunge pool, concierge services and dedicated workspaces, while the project is targeting an 8-Star Green Star rating.

EADE Byron Bay is being exclusively marketed by Projx Australia in conjunction with WHITEFOX Projects.

WHITEFOX National Projects Director Phillip Rand said demand had been driven predominantly by owner-occupiers.

"We are seeing buyers at EADE place significant value on quality, space, design, resort-style amenities and the rarity of this location," Rand says.

"The sales achieved to date demonstrate that purchasers at this level recognise the long-term significance of what is being created at EADE Byron Bay."

Residences at EADE Byron Bay are currently priced between $4.75 million and $15.95 million.

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[smartcode_project_cta:default project_id=145590]

Vitale breaks Byron Bay records with EADE sales flurry 

When buying an apartment, most people compare the big-ticket items first. Floorplans. Kitchens. Balcony size. Natural light. The view.

But there's one everyday consideration that often doesn't come up until after moving in: how parcels are delivered.

As online shopping has become part of everyday life, parcel deliveries have shifted from an occasional event to a regular occurrence. Australians spent a record $82.6 billion shopping online in 2025, with almost one in every four retail dollars now spent digitally.

For apartment residents, that can present a challenge.

If nobody is home to accept a delivery, parcels may be redirected to a nearby Post Office, left in a building lobby or common area, or require building management to step in. In higher-density buildings, where dozens or even hundreds of residents may receive deliveries each day, parcel management has become an increasingly important part of everyday living.

That can create a range of frustrations. A missed delivery often means making time to collect a parcel elsewhere, while packages left unattended in foyers or mail areas can create clutter and increase the risk of theft. What seems like a minor inconvenience can quickly become a recurring issue for residents who shop online regularly.

It's one of those details that rarely features in a display suite but can have a noticeable impact once residents move in.

As a result, buyers are beginning to look beyond traditional apartment features and consider how a building supports day-to-day convenience, including whether there are secure options for receiving deliveries.

Australia Post's Parcel Lockers provide one solution.

<iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="" frameborder="0" height="315" referrerpolicy="strict-origin-when-cross-origin" src="https://www.youtube.com/embed/CkF2oKmlACg?si=C50sDaoUUn2nuLmq" title="YouTube video player" width="560"></iframe>

Rather than having a parcel delivered directly to an apartment, eligible deliveries can be sent to a nominated Parcel Locker. Once the parcel arrives, residents receive a notification through the AusPost app or SMS and can collect it using a QR code or one-time PIN at a time that suits them.

The Parcel Locker network now includes more than 1,500 locations nationwide, with installations at Post Offices, shopping centres, transport hubs and an increasing number of residential developments. By providing a secure collection point, Parcel Lockers help reduce missed deliveries and avoid parcels being left unattended in common areas.

For developers, parcel infrastructure is becoming another way to improve the resident experience. Rather than relying on concierge staff or leaving parcels in communal spaces, secure collection points help streamline deliveries while preserving the presentation and functionality of shared areas.

For buyers, it's a reminder that the best apartment features aren't always the most obvious.

A generous floorplan or quality finishes might help narrow the shortlist, but the conveniences that simplify everyday life, whether that's EV charging, secure bike storage or reliable parcel delivery, often become the features residents appreciate most once they're living there.

The apartment feature many buyers don't think about, until their first missed delivery

<a href="https://www.apartments.com.au/developers/hg-developments">HG Developments</a> is doubling down on Maud Street in Newstead, filing plans for a new apartment tower just a few doors down from its under-construction Aire Newstead development.

Recently submitted to Brisbane City Council, the proposal is for an 18-storey building designed by bureau^proberts, which has drawn heavily on Brisbane's subtropical design principles while referencing the suburb's industrial heritage.

A total of 64 apartments are planned for the amalgamated 1,518 sqm site at <a href="https://www.apartments.com.au/new-apartments/17-21-maud-street-newstead-qld-4006">17–21 Maud Street</a>, a short walk from the Brisbane River and Newstead Riverwalk.

<img alt="First look: HG Developments plans 18-storey subtropical apartment tower for Newstead" data-entity-type="file" data-entity-uuid="a400c7fd-bd15-48f8-a63b-10ede92efe00" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Maud%20st%20bldg.png?VersionId=.0vPmjpbC7CNP7kqGWa6L7rGIwsNExaw" />

"The building is defined by a series of vaulted motifs that reinterpret the arches, colonnades and layered facades evident throughout Newstead's historic built fabric," the Urban Design Report states.

"Combined with recessed glazing and generous balconies, these elements create a layered building envelope that provides shade, weather protection and opportunities for natural ventilation whilst establishing a distinctive architectural identity."

The proposal comprises 64 two, three and four-bedroom apartments across 18 residential levels, positioning it alongside a growing number of taller residential projects transforming Newstead's northern precinct. The tower incorporates extensive subtropical landscaping, with cascading planter boxes, deep planting at street level and a landscaped rooftop recreation area.

<img alt="First look: HG Developments plans 18-storey subtropical apartment tower for Newstead" data-entity-type="file" data-entity-uuid="1d8140f4-8b98-45cd-b1b8-1efe8c8e266b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Maud%20st%20podium.png?VersionId=VAZtbCoD44YCJ57N99fQCAKeSJx7ldZs" />

Bureau Proberts has prioritised passive environmental design throughout the project, with generous balconies, recessed glazing and operable façades helping reduce solar heat gain while maximising natural ventilation. River views become available from the upper levels, while the building has been orientated to capture prevailing breezes from both the Brisbane River and the west.

The architects say landscape is intended to be integral to the building rather than an applied element.

"Vertical greenery, cascading planter boxes and elevated gardens are woven throughout the architecture, softening the built form and strengthening the connection between residents and the subtropical environment."

"Through the integration of landscape, high-quality materials and passive design principles, the development delivers a refined residential address that celebrates Newstead's heritage character while contributing positively to Brisbane's evolving subtropical identity."

Newstead has remained one of Brisbane's most active apartment markets in recent years, with a number of developers continuing to back the inner-city suburb.

HG Developments is currently delivering the 40-apartment Aire Newstead at 25 Maud Street. Fortis recently launched the 65-apartment <a href="https://www.apartments.com.au/new-apartments/crest-walker-newstead-12-kyabra-street-newstead-qld-4006">Crest &amp; Walker</a> on Kyabra Street, while builder-developer BPG and Don O'Rorke's Consolidated Properties are both expected to launch their respective Newstead projects before the end of the year.

HG Developments doubles down in Newstead with second Maud Street apartment development

Walk past a new apartment development promoting its sustainability credentials and it's easy to picture rooftop gardens, mature trees, landscaped courtyards and residents surrounded by nature.

But in many cases, that's not actually what those sustainability ratings guarantee.

Australia's leading environmental rating tools have played a significant role in improving the energy efficiency and environmental performance of buildings. Yet despite their focus on reducing emissions, many don't require developers to include trees, biodiversity or meaningful green space.

In other words, a building can achieve one of the country's highest sustainability ratings while containing little more than concrete, glass and hard landscaping.

That disconnect has led to the emergence of a new movement across Australia's property industry: nature-based cities.

The concept goes beyond designing buildings that consume less energy. Instead, it encourages developers to treat nature as essential infrastructure, integrating biodiversity, tree canopy, living landscapes and green spaces into projects from the earliest stages of planning.

Research has consistently linked access to nature with better physical and mental health, cooler neighbourhoods, improved biodiversity, stronger climate resilience and more connected communities. As Australia's cities continue to become denser, advocates say those outcomes should be considered just as important as energy efficiency.

Nature Based Cities (NBC) was established in 2022 to help accelerate that shift.

Founded by Hamton Executive Chairman Paul Hameister OAM, the not-for-profit was created after research highlighted a significant gap in Australia's sustainability framework. While existing environmental rating tools rewarded energy performance and emissions reductions, they placed little emphasis on the inclusion of living landscapes.

"We've always wanted to do more, and we know other developers who want to do more, but the ESD rating tools just aren't there," Hameister says.

"In Australia, you can have a five-green-star rated building that's concrete and glass with not a blade of grass.

"The focus is on reducing emissions, which is laudable, but there hasn't been enough attention paid to protecting and re-establishing nature. We need both for the health of the environment and for communities."

Since its launch, NBC has developed independent design guidelines and accreditation frameworks that encourage developers to prioritise ecology, biodiversity, tree canopy, walkability and living landscapes alongside traditional sustainability measures. The organisation first focused on medium and high-density residential developments before recently expanding into precinct-scale communities and masterplanned neighbourhoods.

Jan Talacko, founder of sustainability consultancy Ark Resources and a member of the Nature Based Cities Advisory Council, says the initiative addresses an area that has largely been overlooked by the property industry.

"Throughout my 25 years of working collaboratively with all stakeholders in the property sector, I've always favoured a pragmatic approach to sustainable design which encourages initiatives that not only meet environmental expectations but also improve amenity," Talacko says.

"Whilst we are making steady progress in relation to energy and carbon emissions from buildings, there has been much less emphasis on encouraging biodiversity and tackling the urban heat island effect.

"The Nature Based Cities initiative responds to a gap in the suite of tools currently used by the property development sector, which don't provide sufficient incentive, or recognition, for the integration of landscaping and greenery."

For apartment buyers, the shift is also changing the questions worth asking.

Rather than assuming a sustainable building will naturally include abundant green space, buyers are increasingly being encouraged to look beyond environmental ratings and ask what nature is actually being delivered. How much tree canopy will the development create? Has biodiversity been considered? Are landscaped spaces designed for people as well as appearance?

As Australia's cities continue to grow upwards and outwards, the next generation of sustainability may not simply be measured by lower emissions, but by how successfully developments bring nature back into everyday urban life.

Ken Raiss

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