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A recent Federal Court case underlines the potentially destructive consequences when the assets of a family’s self-managed super fund are used in an attempt to save a family’s struggling small business.
The trustee of the super fund in this case made six back-to-back loans totalling $190,000 to his brother-in-law who immediately transferred the money to the trustee’s Sunshine Coast convenience store.
A high price is being paid by the SMSF’s two members – Anthony Shaune Lyons and his wife, Julianne Marie – for the decision to use their super money as working capital for their financially-troubled business:
<ul>
<li>Their savings in the SMSF have been lost. None of the superannuation injected into their family business has been repaid and is, according to the court, irrecoverable. (The $190,000 in loans represented almost all of the super fund’s $193,000 in assets.) </li>
</ul>
<ul>
<li>The court has personally fined the trustee Anthony Shaune Lyons $32,500 plus $5000 towards costs for contravening a range of the most fundamental laws including the bar on providing financial assistance to members or their relatives.</li>
</ul>
<ul>
<li>By using their SMSF assets to prop up their failing business, the couple lost the protection of superannuation as a means to quarantine their super savings from the fate of their convenience store. Superannuation is widely regarded as an effective means for small business operators to gain asset-protection subject to certain conditions.</li>
</ul>
The couple is now bankrupt because of personal debts incurred in running their business. Their plight is setout in stark detail in the court’s judgment, <a href="https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2014/2014fca1353">Deputy Commissioner of Taxation (Superannuation) v Anthony Shaune Lyons</a>.
Peter Crump, superannuation strategist for ipac South Australia, is emphatically against business owners using their super savings to try to save their financially-troubled businesses.
Crump, who is chairman of the SMSF Professionals’ Association of Australia, says owners of small businesses that are experiencing difficulties may tend to look at their business’s chances of recovering with “very rose-coloured” glasses.
“They may say to themselves, ‘I only need to put in a little more money to see the business through’. It is in a similar vein to gambling,” Crump believes.
The sad experience of the business couple in this court case highlights why SME business owners should:
<ol>
<li>
Not overlook the excellent asset-protection qualities of superannuation  Assets held in a super fund are generally inaccessible to trustees in bankruptcy – provided contributions were not made with the main purpose of defeating creditors. “By moving savings outside super,” says Crump, “you are exposing those savings. Keeping super and business assets separate is one of the key advantages of superannuation.” 
</li>
<li>
Know when to quit a failing business and understand the need for quality professional advice Rather than chasing good money after bad in a failing business, Crump says business owners should listen to expert and independent professional advice about when to quit. “You should have advisers with the courage and conviction to tell you when to quit a business,” he stresses. 
</li>
<li>
Never overlook thefundamental laws of super  The trustee in this court case contravened the most basic laws of super. The trustee breached the sole-purpose test (a super fund must be maintained to provide retirement benefits); the ban on providing financial assistance or loans to fund members and their relatives; the in-house asset rule (with a few exceptions, super funds are prohibited from making loans or having investments with related parties and entities that exceed 5% of its total asset value); and the requirement that transactions must be conducted on an arm’s length basis. 
</li>
<li>
Recognise the “certainty of detection” for illegal payments from a super fund  Crump says a superannuation auditor conducting the compulsory annual audit of a super fund will inevitably detect and ask for an explanation about such transactions as loans to members or their relatives.</li>
</ol>
This article first appeared on <a href="https://www.smartcompany.com.au/" target="_blank">SmartCompany</a>. 
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SMSF money lost in failed attempt to save business: Four ways to protect your SMSF

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The unfulfilled dream of countless small business owners is to run an active business through their self-managed super fund (SMSF).
The typical driver is to pay tax at half the corporate rate or no tax once the super fund is in the pension phase.
During his 40-plus years advising SMSFs, Martin Murden has had at least one request a year from fund trustees for advice about whether they can operate a business, such as a corner shop, through a self-managed fund.
But Murden, a director of SMSF consulting and auditing with the Partners Wealth Group, says none of these trustees to his knowledge has gone ahead and operated a business through their SMSF after listening to his warnings.
While Murden says that the law does not, in theory, prohibit SMSFs from running active businesses, various superannuation and trust laws make it highly impractical.
Here are five questions that fund trustees should ask themselves before trying to setup an active business in their SMSFs:
<ol>
<li>
Will your fund still comply with the sole-purpose test if running a business? This is the biggest stumbling block to an SMSF operating an active business. Under the sole purpose test, a super fund must be maintained for the purpose of providing retirement or death benefits to members. Indeed, Stuart Jones, author of the Australian Superannuation Handbook 2014-15, published by Thomson Reuters, writes that the Tax Office, as self-managed super regulator, “generally considers” an SMSF is breaching the sole-purpose test if conducting a business. 
</li>
<li>
Does your SMSF trust deed allow the fund to operate an active business? An SMSF may not be permitted by trust law to carry out a business unless expressly empowered under its trust deed, Jones warns. 
</li>
<li>
Can your SMSF business operate without an overdraft? Murden says the strict limits on borrowing by an SMSF will prevent the fund having an overdraft. SMSF are prohibited from borrowing except in limited circumstances. An SMSF can borrow for up to 90 days to pay a member benefit or to cover the settlement of securities such as shares and bonds. (Such loans must not exceed 10% of a fund’s assets.) 
</li>
<li>
Will your SMSF business have to pay cash for its trading stock? An SMSF is prohibited from lending to members or relatives of members, Murden stresses. 
</li>
<li>
Will your SMSF business employ members or relatives of members? While superannuation law does not prohibit a fund from employing members and relatives, their employment may encourage the Tax Office, as SMSF regulator, to take a closer look.
</li>
</ol>
Jones says the regulator may look at the “stated rationale” for employing family members and at the level of income.
In regard to salaries paid to family members, Murden points to provisions in superannuation law requiring funds to conduct their affairs on an arm’s length, commercial basis.
An inflated salary paid to a family member would also be an issue under the sole-purpose test.
As Murden says, it is common for SME owners to own their business premises through their SMSFs. Business real estate is among the few types of assets that SMSFs are permitted to acquire from their members and other related parties.
And business real estate is one of the few types of assets that funds can lease to related parties – including fund members and their businesses – without a restriction on its value.
However, running an active business through an SMSF is much harder to achieve without breaching superannuation and trust laws.
This article first appeared on <a href="https://www.smartcompany.com.au/" target="_blank">SmartCompany</a>.
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Five questions you should ask before trying to run a business through an SMSF

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Trustees of self-managed super funds (SMSFs) are increasingly putting their retirement savings in jeopardy by granting high-risk, high-interest loans to unrelated businesses in an effort to boost returns in a low-interest environment.
Chris Malkin, senior consultant auditor with Baumgartner Superannuation, suspects that many of the SMSF trustees granting these commercial loans do not understand the extra risks and legal complications involved.
“Some funds are effectively turning themselves into lenders of last resort,” Malkin says. “High-interest, high-risk loans are hardly appropriate investments for super funds.”
Typically when SMSFs strike difficulties with lending money, <a href="https://www.smartcompany.com.au/finance/superannuation/44336-risky-business-using-a-self-managed-super-fund-as-a-personal-bank" target="_blank">the loans have been made to related parties</a>. However, a recent Federal Court case highlights the potential extra risks for super funds when making high-interest loans to unrelated parties.
In the case of <a href="https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2014/2014fca1034" target="_blank">Pozzebon (Trustee) v Australian Gaming and Entertainment Ltd (in liquidation)</a>, a husband-and-wife SMSF agreed in December 2013 to grant a $250,000 secured loan to a Perth-based business, which had agreed to provide security over corporate assets. Five months later, the company went into voluntary liquidation.
The SMSF then claimed that the liquidated company owed the fund $348,713 – $98,713 higher than the amount of the initial loan.
However, the Federal Court ruled the SMSF was an unsecured creditor after finding the fund had not registered the “security interest” on the relatively new Personal Property Securities Register within the required time.
Stuart Jones, author of the Australian Superannuation Handbook 2014-15, says: “The Pozzebon case serves as a warning to SMSF trustees chasing a higher yield that commercial loan investments are intrinsically problematic for most trustees in terms of the skills required to assess and manage the additional risks in such loans.”
Martin Murden, a director of SMSF consulting and auditing with the Partners Wealth Group, says his annual auditing of SMSFs show more funds are granting high-interest commercial loans. And he expects this trend to grow during the current financial year.
Murden believes that most of the SMSFs being drawn into investing in high-interest, high-risk loans already hold a high proportion of their assets in fixed interest and have become dissatisfied with prevailing interest rates.
He says such SMSF trustees typically don’t want to invest in residential real estate because of their concerns about a property bubble yet find the share market too volatile.
Stuart Jones of Thomson Reuters says there is nothing under the Superannuation Industry (Supervision) Act (SIS) to prohibit an SMSF from investing in a loan to an unrelated borrower.
However, Jones says the loan would still need to comply with SIS investment rules including the sole-purpose test, trustee duties, arm’s length dealings and mandatory investment strategy. (Under the sole-purpose test, a super fund must be maintained for the purpose of providing retirement or death benefits to members.)
“The risks associated with a commercial loan would also need to be suitable as part of the fund’s written investment strategy,” Jones stresses. “Therefore, at minimum, a trustee considering an investment loan would need to establish a detailed risk-management plan for the life of the loan.”
Jones says if an SMSF trustee is going to “make loans like a bank”, it needs to assess the loan application and take security, ideally real estate, “like a bank”. This would typically require specialist and accounting advice to assess the loan investment and to ensure security for the loan or priority status among creditors in the event of a default.
This article first appeared on <a href="https://www.smartcompany.com.au" target="_blank">SmartCompany</a>.
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Beware the property bubble loan trap for SMSFs chasing high yields

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A Federal Court judgment this month provides telling lessons for members of self-managed super funds (SMSFs), including those operating small-medium businesses.
The court personally fined the husband-and-wife directors of their SMSF’s corporate trustee a total of $50,000 for a series of contraventions of superannuation law, including the making of 80 “loans” to members, namely themselves.
Fund money was also used to buy study cattle “for hobby purposes” as well as to pay veterinary bills and other related expenses without the fund earning income from the expenditure. The couple, who were the only members of their SMSF, operates a livestock business in Victoria.
Further, the trustees allowed their son to live in a fund-owned property without paying the rent required under the lease. And the fund had spent $48,500 on furniture before the lease commenced.
This court case – <a href="https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2014/2014fca1101">Deputy Commissioner of Taxation (Superannuation) versus Graham Family Superannuation Pty Ltd, Ian Christopher Graham and Carolyn Ann Graham</a> – illustrates the risks when SMSF members mix their superannuation and their non-superannuation finances.
Peter Bobbin, principal of lawyers Rockwell Olivier in Sydney, says: “Without doubt, the couple used the super fund as a personal bank to fund their [pre-retirement] lifestyles.”
There is no suggestion in the judgment that the husband-and-wife trustee directors/members in this case used money from their SMSF in relationship to their business. However, Bobbin and Chris Malkin, the senior consultant auditor with Baumgartner Superannuation, say the case represents a warning for SME owners about the dangers of mixing their super, their business and personal finances.
“This case reminds me of the need for SME owners to quarantine their superannuation from their business activities,” says Bobbin. And Malkin believes that SME owners can face a greater temptation than other members to use their super money for purposes other than for their retirement.
“The simple reason is that the cash-flows of SME owners are sometimes stretched and some may see their super fund as a pseudo bank,” says Malkin.
The couple’s contraventions of superannuation law included breaching superannuation’s sole purpose test, providing financial assistance to members, exceeding the limits on in-house assets and failing to conduct dealings on an arm’s length basis.
This case should reinforce to SMSF members regarding some of the most fundamental provisions in superannuation law. These include:
<ol>
<li>The sole-purpose test: A super fund must be maintained for the purpose of providing retirement or death benefits to members.</li>
<li>The ban on providing financial assistance, including loans, to members or their relatives: Significantly, there is no exemption under the in-house rule (see next point) to the ban on providing financial assistance to members.</li>
<li>The in-house asset rule: SMSFs are generally prohibited from making loans, providing leases or having investments with related parties and entities that exceed 5% of its total asset value. (One of the very few exemptions to the in-house asset rule is business real estate.)</li>
<li>Arm’s length investments: A fund must make investments on an arm’s length, commercial basis.
</li>
</ol>
As Peter Bobbin of Rockwell Olivier says, the ATO in this instance did not revoke the SMSF’s complying status but had decided to pursue the trustees through the court.
When an SMSF is declared non-complying, its assets – less any after-tax, non-concessional contributions – are taxed at the highest marginal rate. This is widely regarded as an ultimate sanction against an SMSF.
Stuart Jones, author of the Australian Superannuation Handbook 2014-15 (published by Thomson Reuters) expects that the ATO is likely to apply its new administrative penalty regime, in force from July this year, to similar cases in the future.
Under the new penalty regime, the Tax Office can directly and personally fine SMSF trustees by imposing an administrative penalty (ranging from $850 to $10,200) intended to match the seriousness of the contravention. Therefore, the ATO does not have to go through the expensive and time-consuming process of seeking court-imposed penalties.
Jones says the commissioner still has the option of applying for a civil penalty court order of up to $220,000 for each offence, or even instituting criminal proceedings in certain cases.
Given the large number of contraventions in the Graham family matter, Malkin suspects the overall penalties would have been significantly higher if it had been dealt with under the new penalty regime.
This article first appeared on <a href="https://www.SmartCompany.com.au" target="_blank">SmartCompany</a>.
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SMSFs warned against using fund as 'personal bank'

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More SME owners will focus much more closely in coming months on the pros and cons of buying and gearing their businesses premises through their self-managed super funds.
Specialists in superannuation, investment and business advice <a href="https://www.smartcompany.com.au/finance/superannuation/43421-self-managed-super-smes-to-expedite-gearing-of-business-premises" target="_blank">expect SME owners to consider accelerating any existing plans</a> to gear their business premises through their self-managed super funds. This follows renewed debate about whether to bar future gearing.
The interim report of the Australian government’s inquiry into the financial system calls for views about whether superannuation gearing should be prospectively prohibited because it “may create vulnerabilities for the superannuation and financial systems”.
Here are 10 critical points to consider when deciding whether your SMSF should acquire business premises, typically through gearing, to rent to your family business:
Pros
<ol>
<li>
Family businesses may make excellent tenants Sue Prestney, a partner at PwC Private Clients, says that in her experience, family businesses tend to make “excellent” tenants for their SMSF-owned business premises. Again speaking in regard to her own clients, Prestney says their family businesses typically pay their rent on time to their SMSF. “They look after the premises like it was their own.” Martin Murden, a director of SMSF consulting and auditing with the Partners Wealth Group, says family businesses make “great” tenants provided the business is successful. And Murden says dealings between a family SMSF as landlord and a family business as tenant can be smoother – regarding such things as rent reviews – than with an arm’s-length tenant. 
</li>
<li>
Exception for business property Business real estate is one of the limited types of assets that SMSFs are allowed to acquire from related parties including members. And business real estate is one of the few types of assets that SMSFs can lease to related parties, including the members’ businesses, without a limit on its value under the in-house asset rules in superannuation law. 
</li>
<li>
Concessional tax treatment During an SMSF’s accumulation or saving phase, rents are taxed at 15% within the fund while capital gains are taxed at an effective 10% if the property is held for more than 12 months. And once the business premises are backing the payment of a superannuation pension, fund income and capital gains are tax-free. This means that the SMSF may eventually be able to sell a property in the pension phase without paying CGT on any profits. SMSFs in the accumulation phase can claim the same types of tax deductions as individual investors who buy properties in their own names including negative-gearing deductions for the shortfall between the deductible expenses, including interest payments, and rental income. 
</li>
<li>
Business succession and estate planning SMSF trustees aim to keep the premises of their family businesses in their super fund through generations, with the aim of gaining greater security of tenure for the business as well as business succession and estate-planning benefits. Under this strategy, an SMSF will need sufficient other assets to pay member superannuation benefits when necessary for older members such as a business’s founders. 
</li>
<li>
Asset protection Business premises held in an SMSF are generally out of the reach of creditors if individual fund members are declared bankrupt – subject to claw-back provisions in the Bankruptcy Act.
</li>
</ol>
Article continues on the next page. Please click below. 
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Cons
<ol>
<li>
Potential conflicts if family business struggles to pay rent While the principals of a troubled family business may need the premises to keep trading, the family SMSF’s trustees – who are often the same people – must maintain the fund for the core or sole purpose of paying member benefits. Additionally, funds are prohibited from providing financial assistance to members, says Murden. This includes giving rent relief to family businesses in financial difficulties. 
</li>
<li>
High-cost business premises can dominate an SMSF’s portfolio This can make it to diversify a fund’s portfolio to spread investment risks and opportunities. When preparing their mandatory investment strategies, SMSF trustees must consider such factors as investment risk, portfolio diversification, liquidity of investments, ability to pay member benefits and the members’ circumstances. Peter Crump, superannuation strategist for ipac South Australia, says that super funds are not legally required to diversify their investments but emphasises that trustees must consider diversification when preparing their investment strategies. Indeed, some fund trustees specifically decide to have SMSF portfolios dominated by a single property asset, such as the premises of their businesses, perhaps after considering the diversification of their other super and non-super investments. 
</li>
<li>
It may be more tax-effective to gear business premises outside super Much will depend on the circumstances. First, the superannuation tax rate is much lower than most personal marginal tax rates, thus providing potentially lower tax deductions for negative gearing. Second, lenders usually require a much higher deposit for SMSF gearing, which means a property is likely to remain negatively-geared for a relatively short period – if at all. As well, SMSF trustees should be cautious about relying too much on the possibility that the business premises will eventually be sold when the asset is backing the payment of a pension and thus becomes exempt from CGT. Crump suggests that trustees recognise that the fund may well sell the property before it becomes exempt from CGT. 
</li>
<li>
Potential costly traps in conditions for super gearing SMSFs should gain quality professional advice to ensure compliance with the strict conditions allowing funds to borrow. Mistakes can be costly. SMSF Trustees must enter a limited recourse borrowing arrangement and a geared asset must be held in a separate trust until the load is repaid. Lenders cannot make a claim against any other assets of the super fund in the event of a default on the loan. 
</li>
<li>
SMSF could face severe financial setback following loan default Despite the requirement for a limited recourse loan, an SMSF that defaults on a loan to buy business premises could lose its sizeable deposit plus capital repayments and payments of interests and costs. Upon a property’s forced sale, a defaulting fund would be paid whatever is left after the lender recovers any outstanding amounts including the cost of a forced sale and the discharge of the mortgage.
</li>
</ol>
This article first appeared on <a href="https://www.SmartCompany.com.au" target="_blank">SmartCompany</a>. 
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Should your SMSF own your business premises? The pros and cons

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SME owners are likely to accelerate existing plans to gear their business premises through their self-managed super funds after renewed debate about whether to bar future superannuation gearing, say advisers to SMSFs and small-medium businesses.
Business owners are among the biggest supporters of self-managed super with superannuation gearing to acquire business premises becoming an increasingly popular strategy.
The recent <a href="https://fsi.gov.au/files/2014/07/FSI_Report_Final_Reduced20140715.pdf" target="_blank">interim report</a> of the Australian government’s current inquiry into the financial system, chaired by David Murray, is calling for views about whether superannuation gearing should be prospectively prohibited.
“If allowed to continue, growth in direct leverage by superannuation funds, although embryonic, may create vulnerabilities for the superannuation and financial systems,” the inquiry observes.
The inquiry’s final report is scheduled to be delivered to the Treasurer by November 14, although it is not known how long the government may take to react to its final recommendations.
SMSF specialist adviser Peter Crump says: “Where there is a hint that an investment opportunity may be closing, people who have been thinking about it should stop vacillating and make a decision – one way or the other.”
Crump, superannuation strategist for financial advice company ipac South Australia, believes that the financial inquiry’s call for views about the possible future barring of super gearing may prompt SME owners who have already been considering gearing their premises to focus their attention.
And Crump says good advisers have a responsibility to alert clients who had been discussing the gearing strategy with them about the possible impact of the financial inquiry.
“I think as advisers, we have a responsibility to keep our clients fully aware; otherwise we have let them down,” he adds. Crump is chairman of the SMSF Professionals’ Association of Australia (SPAA).
SMSF auditor Martin Murden believes the raising of the possible removal of superannuation gearing is a “potential trigger” for SME owners who had been examining whether to gear their business premises through their SMSFs to reach a decision.
Murden, a director of SMSF consulting and auditing with the Partners Wealth Group and author of How to invest in property through your self managed super fund, says the financial inquiry provides something of a deadline for SMEs to make up their minds.
And Naree Brooks, a partner at PwC Private Clients, makes a similar comment: “If SMEs had been thinking about gearing their premises through their SMSFs, the Murray inquiry may bring forward the decision making.”
Article continues on the next page. Please click below.
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Sue Prestney, a partner at PwC Private Clients, says the majority of her medium-sized business clients up to August 1999 had acquired their business premises through their SMSFs, using geared trusts associated with the members. (The law had changed at that date, making such trusts so-called in-house assets of the funds and effectively ending the future gearing of SMSFs in that way.)
Prestney estimates that at least 30% of SMEs who have become her clients since 1999 now hold their business premises in their SMSFs with some of their SMSFs gearing through limited recourse loans, permitted under strict conditions for the past seven years.
“SMEs generally have their resources tied up in their businesses,” Prestney adds, “and usually the only way they can buy their business premises is through their super funds.”
Depending upon the circumstances, the holding business premises in a business owner’s SMSF can provide tax, asset protection, estate planning and business succession benefits.
Since September 2007, super funds have been permitted to borrow to invest – as an exemption to the general bar on borrowing – using limited recourse borrowing arrangements. Geared asset must be held in a holding trust until the loan is repaid.
SMEs owners who hold their business premises in their SMSF must pay an arm’s length rent to the fund, which pays concessional tax on the rental income.
Business property is one the few types of assets that SMSFs are allowed to acquire from their members and other related parties. As well, business property is one of the few types of assets that funds can lease to related parties, including the members’ businesses – without being limited by the in-house asset rules in superannuation law.
The ATO’s latest <a href="https://www.ato.gov.au/Super/Self-managed-super-funds/In-detail/Statistics/Quarterly-reports/Self-managed-super-fund-statistical-report---March-2014/">self-managed super fund statistical report</a> shows SMSFs owed $2.72 billion in limited resource loans in March, up from $497 million in June 2009. These loans represent half a percent of total SMSF assets. The value of commercial property held by SMSFs is three times greater than the value of their residential property.
PwC’s Brooks says the gearing of businesses premises through SMSFs is increasingly popular among SME owners. Brooks believes a “second wave” of business owners are following the strategy, having progressively built-up their super balances under the more restrictive contribution caps. Further, limited recourse loans are more competitively priced.
Surveys by Investment Trends suggest that 38,000 SMSFs hold geared investments and that one of the main reasons why members of large super funds say they intend to setup an SMSF in the future is to invest in property.
This article first appeared on <a href="https://www.smartcompany.com.au/" target="_blank">SmartCompany</a>.
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Small business owners pushing for self-managed super gearing of business premises

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Superannuation law allows self-managed super funds to borrow to invest provided strict rules are met.
Geared assets must be held in a special trust until payment of the final installment.
And lenders cannot make a claim against any other assets of the super fund – apart from the geared asset – in the event of a default on the loan.
Martin Murden, director of SMSF consulting with the Partners Group in Melbourne, says his firm receives about one serious question a day from people who are interested in gearing through an SMSF.
“This is beyond tyre-kicking,” he emphasises.
<hr>
This article is part of Property Observer's <a href="http://propertyobserver.com.au/ebooks/free-ebook-21-dos-and-donts-for-smsf-property-investors" style="color: #000000; font-size: 15px;">free eBook: 21 do’s and don’ts for SMSF property investors</a>.
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Do understand the basics of SMSF gearing

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An SMSF can own business property (such as offices, shops and factories) and residential investment property.
However, there are crucial differences between the legal requirements for funds regarding business and residential properties.
Business real estate is among the few types of assets that SMSFs are permitted to acquire from their members and other related parties.
And business real estate is one of the few types of assets that funds can lease to related parties – including fund members and their businesses – without a restriction on its value.
Generally, an SMSF is barred under the in-house asset rules in superannuation law from leasing or having investments with related parties involving assets that are worth more than 5% of the fund’s total market value.
Business property is among the few exceptions to the rule.
SMSFs are prohibited from acquiring residential real estate from related parties– even if the market value is paid.
An SMSF can be the sole owner of a property or hold a property with other investors, commonly using a unit trustor joint-ownership arrangement.
Some SMSFs enter arrangements to hold property with their own membersor with other SMSFs.
This enables the funds to invest in otherwise unaffordable properties.
<hr>
This article is part of the <a style="color: #000000; font-size: 15px;" href="http://propertyobserver.com.au/ebooks/free-ebook-21-dos-and-donts-for-smsf-property-investors">free eBook: 21 do’s and don’ts for SMSF property investors</a>. 
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Do understand what types of property your fund can own

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Fund trustees should consider eventual disposal of a property even before their fund even buys it, says Martin Murden, director of SMSF consulting with the Partners Group in Melbourne.
For instance, many trustees plan for their SMSFs to own a direct property until the point of their retirement.
Such long-term planning helps minimise the risk of having to quickly sell a property to pay membe rbenefits or to switch to higher-yield investments in retirement.
Upon retirement, SMSF trustees can decide whether to:
• Sell the property to distribute retirement benefits to members. (If the property is backing the payment of a superannuation pension at the time of sale, no CGT is payable under current law.)
• Allow a member to acquire the property as a retirement benefit. (The trustees would have to consider possible CGT implications.) Some members use a former fund-owned property as thei rretirement home.
• Keep the property in the SMSF togenerate income for the members’ superannuation pensions.
 
<hr>
 This article is part of Property Observer's <a href="http://propertyobserver.com.au/ebooks/free-ebook-21-dos-and-donts-for-smsf-property-investors" style="color: #000000; font-size: 15px;">free eBook: 21 do’s and don’ts for SMSF property investors</a>.
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Do consider how SMSF will eventually dispose of a property

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Superannuation law does not prohibit a fund from owning just one asset such as a valuable investment property.
Indeed, some fund trustees specifically decide to have SMSF portfolios dominated by a single property asset, perhaps after considering the diversification of their other super and non-super investments.
SMSFs are required to have written investment strategies.
And when preparing their strategies, trustees must consider such factors as investment risk, portfolio diversification, liquidity of investments, ability to pay member benefits and the members’ circumstances.
Despite the requirement that fund trustee smust consider diversification when preparing an investment strategy, they are not legally required to diversify.
Financial planners and superannuation specialists typically urge fund trustees to recognise the possible consequences if their retirement savings are overly dependent on the profitability of a single, high-cost asset.
<hr>
This article is part of Property Observer's <a href="http://propertyobserver.com.au/ebooks/free-ebook-21-dos-and-donts-for-smsf-property-investors" style="color: #000000; font-size: 15px;">free eBook: 21 do’s and don’ts for SMSF property investors</a>. 
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Do think about impacts of direct property on your fund's diversification

A collection of just 25 large-format apartments and penthouses overlooking Goodwin Park is entering the Coolangatta market, with <a href="https://www.apartments.com.au/new-apartments/marea-residences-coolangatta-27-27a-dixon-street-coolangatta-qld-4225">Maréa Residences</a> combining a low-density, residential-only approach with uninterrupted park and Pacific Ocean outlooks.

Located at 27 Dixon Street, Maréa comprises three and four-bedroom residences alongside a limited number of dual-level penthouses, with the project positioned between Goodwin Park and <a href="https://www.apartments.com.au/developments/coolangatta-qld-4225">Coolangatta</a>’s coastal precinct.

Construction has commenced, with completion currently estimated for late 2027. Three-bedroom residences are priced from $1.8 million.

[smartcode_project:default project_id=150999 project_image_fid=374005]

The project has been designed around its northern outlook across the park, with the building’s architecture, landscaping and material palette intended to establish a connection with the neighbouring green space. The residences have been configured to maximise natural light and views across Goodwin Park towards the ocean.

Inside, the material palette incorporates timber, stone and brushed brass, complemented by curved detailing and ambient lighting. Kitchens and bathrooms carry the same natural material approach, while residences also include basement parking, storage and lift access.

Maréa’s penthouses are arranged over two levels and include private pools, adding another layer to the project’s focus on larger-format apartment living. Across the development, residences are configured with three or four bedrooms rather than the broader mix of smaller apartment types commonly found in larger projects.

[smartcode_project:default project_id=150999 project_image_fid=374010]

Resident amenity is concentrated at rooftop level, where landscaped entertaining terraces and pools take advantage of elevated views across Coolangatta and the Pacific Ocean.

The project has so far been particularly well received by local owner-occupiers and downsizers, according to Urban Activation Property Sales and Marketing Director Matt George, with the residential-only format, construction quality and northern park outlook among the features resonating with purchasers.

“The uninterrupted northern aspect overlooking Goodwin Park has been a key point of difference, with buyers attracted to the sense of serenity and open space the park provides, while still enjoying easy access to the ocean and being within walking distance of the lifestyle and amenities Coolangatta has to offer,” George said.

[smartcode_project:default project_id=150999 project_image_fid=374002]

“The combination of high-quality construction, a residential-only building, park outlook and proximity to the beach has resonated strongly with the local downsizer market.”

The Dixon Street address is within walking distance of Coolangatta Beach and the broader southern Gold Coast coastline, including the surf breaks at Snapper Rocks and Kirra. Coolangatta’s cafés, restaurants and retail are nearby, while Gold Coast Airport is also within close proximity.

[smartcode_project_cta:default project_id=150999]

Joel Robinson

Maréa Residences brings parkside apartments to Coolangatta

Melbourne developer PDG has secured Victorian Government approval for its $1.5 billion Southbank development <a href="https://www.apartments.com.au/new-apartments/the-one-1-queens-bridge-street-southbank-vic-3006">The One</a>, clearing the way for the long-dormant riverfront site opposite Crown to finally be developed.

The Minister for Planning has approved the project at 1-29 Queens Bridge Street, with the Department of Transport and Planning issuing the planning permit following its assessment.

The approval will allow PDG to develop the prominent 5,059 sqm site with a major mixed-use tower comprising premium apartments, including branded residences, a luxury hotel and boutique office space.

PDG acquired the site in late 2024, with its position directly opposite Crown's main entrance and near Melbourne's Arts Precinct making it one of Southbank's most significant remaining development opportunities.

<img alt="PDG" data-entity-type="file" data-entity-uuid="3933013e-6332-4386-b9be-089df05caf17" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%209.29.22%E2%80%AFAM.png?VersionId=sITIgBqDL0N3VNSMwWEmF5UA.uvcsRyu" />

Designed by COX in collaboration with ODO and PDG, the tower's architecture draws on the movement of the Yarra River, with six vertical pleats running the height of the sculpted facade.

The project will also see the heritage-listed Queens Bridge Hotel restored and incorporated into the development&nbsp;with new hospitality and public uses, including a rooftop venue.

A significant component of The One will be its residential amenity.

More than 5,000 sqm of resident facilities will be delivered across a single level, making it one of the largest consolidated residential amenity offerings proposed in an Australian apartment development.

The planning approval also incorporates a major upgrade of Queensbridge Square, which PDG will deliver in partnership with the City of Melbourne.

<img alt="PDG" data-entity-type="file" data-entity-uuid="73167fcd-1031-4b6f-a408-a064cfe45ed1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%209.29.17%E2%80%AFAM.png?VersionId=Pf1AEWxw6SNmBqR0zQW5lyEze.MtxgFp" />

The existing square will be revitalised as a new civic and pedestrian space along the Yarra River, strengthening the connection between the project, Southbank and the riverfront.

PDG Founder and Managing Director Vince Giuliano said the approval represented a major milestone for a site which has remained largely underutilised for more than 15 years.

“This is the most significant Planning Permit approval Melbourne has seen in recent years,” Giuliano said.

“For more than 15 years, this site has remained underutilised. This approval enables us to deliver a project that will contribute meaningfully to the revitalisation of Southbank, restore and reactivate an important heritage building, and create a new civic and hospitality destination for Melbourne.”

The latest approval follows an earlier planning permit issued by the City of Melbourne covering demolition works across part of the site at 9-29 Queens Bridge Street. Those demolition and early works are already underway.

PDG has also started generating early interest in the residential component from owner-occupiers ahead of a planned public launch in early 2027.

PDG secures approval for $1.5bn Southbank apartment development, The One

Local developer Harridan is seeking to turn its Woolloongabba apartment project into the first stage of a broader transformation of Burke Street, using a new 16-storey mixed-use building to establish a greener pedestrian connection toward the rapidly evolving Boggo Road transport and knowledge precinct.

The South East Queensland developer has filed plans for 154 apartments on the <a href="https://www.apartments.com.au/new-apartments/4-burke-street-woolloongabba-qld-4102">southern side of Burke Street</a>, where its proposal has been designed alongside a wider vision by LatStudios for the street.

That vision positions the southern side of Burke Street for buildings of 15 storeys and above, while envisaging lower-rise development of up to five storeys on the northern side to transition into Woolloongabba's existing character housing. It also proposes wider pedestrian verges, deep planting, new street trees and upgrades to the pedestrian approach to Boggo Road Station.

The Harridan development itself has been designed by Brisbane-based Arqus Design and will comprise 154 apartments across 16 storeys. The mix is weighted heavily toward two-bedroom apartments, with 121 proposed alongside 10 one-bedroom and 23 three-bedroom residences. There will typically be around 14 units per floor.

A lower-ground car park and three podium levels will accommodate 156 resident parking spaces, along with visitor and commercial parking. There will also be 154 resident bicycle spaces and 40 visitor bicycle parks.

&nbsp;

Harridan is a family-owned developer and part of the Holmwood Highgate Group, with more than three decades of development activity across South East Queensland. Its portfolio spans residential, commercial and industrial property, with current residential projects including Riverbank on Byron in Bulimba, Esperance Residences in Carina and The Precinct at Kinross Road in Thornlands.

Wooloongabba has been popular for apartment developers, particularly since the announcement of the 2032 Summer Olympics games in Brisbane.

While there have been a lot of development applications, it has failed to materialize into real supply.&nbsp;

Sarazin has been the major player in the area. They are under construction at Murcia Residences, on the fringe of East Brisbane and Woolloongabba. They have just launched <a href="https://www.apartments.com.au/new-apartments/the-stanley-residences-woolloongabba-8-trafalgar-street-woolloongabba-qld-4102">The Stanley Residences</a>, in Woolloongabba on Trafalagar Street. They also have Nuage coming soon on the nearby <a href="https://www.apartments.com.au/new-apartments/nuage-woolloongabba-14-wellington-road-woolloongabba-qld-4102">Wellington Road</a>.

First look: Harridan plans Burke Street transformation beside Boggo Road transport hub

IN BRIEF

<ul>
	<li>
	Just three double-storey Sky Homes sit at the top of The Waterline, each with its own private marina berth and rooftop terrace.
	</li>
	<li>
	Construction on The Waterline is complete, with the first residents expected to move in from mid-October.
	</li>
	<li>
	Sky Homes range from 282 sqm to 367 sqm and are priced from $3.65 million.
	</li>
</ul>

<hr />
Lewis Land has opened the first completed sky home for inspection at Harbour Shores, giving buyers their first opportunity to step inside one of just three double-storey residences crowning The Waterline.

Each sky home comes with its own private marina berth, rooftop terrace and Broadwater views, combining the scale of a larger home with direct access to the boating lifestyle that underpins the wider <a href="https://www.apartments.com.au/new-apartments/harbour-shores-biggera-waters-564-oxley-drive-biggera-waters-qld-4216">Harbour Shores</a> masterplan.

[smartcode_project:default project_id=113271 project_image_fid=366708]

Lewis Land Head of Development Michael Long said the inclusion of a berth with every Sky Home had become increasingly valuable as marina access across the Gold Coast tightened.

“Marina berths are becoming increasingly difficult to secure across the Gold Coast, so including one with every Sky Home makes this a genuinely rare offering,” Long said.

“The private 70-berth marina will accommodate boats up to 12 metres in length and is positioned just 2.5 kilometres from the Broadwater, placing the open ocean only 15 minutes away.

“Being able to step out of your home onto your boat is a rare luxury, and it’s something residents here can look forward to when it opens later this year.”

[smartcode_project:default project_id=113271 project_image_fid=366709]

The display opening comes as construction completes on The Waterline, with the first residents expected to move in from mid-October.

The three Sky Homes range from 282 sqm to 367 sqm and each feature three bedrooms, three bathrooms, multiple living zones, expansive kitchens with butler's pantries and large balconies taking in the Broadwater outlook.

Each residence also has three secure basement car spaces and additional storage.

“This is the first opportunity the Gold Coast has had to step into Harbour Shores and see, touch and feel what we’re bringing to life here,” Long said.

“There are only three Sky Homes within The Waterline, ranging in size from 282sqm to 367sqm, with each residence featuring three large bedrooms, three bathrooms, multiple living zones, expansive custom-built kitchens with butler’s pantry, and large balconies capturing Broadwater views.”

<img alt="Harbour Shores" data-entity-type="file" data-entity-uuid="bab65e10-4fab-45e1-92d8-fc56e2ab98ff" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-25%20at%202.00.16%E2%80%AFPM.png?VersionId=XT8q76LsPkw3cYTsvN3JfFDaPLud90PN" />

Residents of The Waterline will have access to a private pool, along with Harbour Shores' wider collection of amenity including a lagoon pool, social clubhouse, tennis court, gym, yoga facilities and sauna.

Lewis Land partnered with Studio Collective to furnish the completed display, with the interiors designed to demonstrate how the residences could function as permanent homes rather than simply as show apartments.

Studio Collective Director Melissa Park said the surrounding waterways informed the interiors, but in a more restrained way than a traditional coastal scheme.

“We drew inspiration from the canals and coastal surrounds, but our approach was to interpret that subtly through layered materials and a grounded palette of earthy tones, rather than literal coastal references,” Park said.

“We introduced hero moments of green and teal to reference the surrounding waterways, while mirrored elements help reflect natural light.

“The result is a residence that feels elevated yet comfortable, somewhere buyers can genuinely imagine themselves living, entertaining and unwinding.”

Sky Homes are priced from $3.65 million.

Lewis Land is also offering private marina berths with The Residences, its limited collection of three and four-bedroom villas positioned directly along the Harbour Shores waterfront boardwalk.

Three-bedroom villas are priced from $2.99 million, while four-bedroom residences start from $3.19 million.

Harbour Shores is being marketed by Colliers International.

[smartcode_project_cta:default project_id=113271]

Lewis Land opens sky home display as The Waterline completes at Harbour Shores

St Vincent de Paul Society Housing Australia has filed plans for a major mixed-use housing precinct on the southern edge of the North Sydney CBD, adding another significant proposal to a pocket around North Sydn​ey Station that is quickly becoming one of the LGA's busiest development zones.

The State Significant Development Application covers a 5,990 sqm site at <a href="https://www.apartments.com.au/new-apartments/1-19-mackenzie-street-lavender-bay-nsw-2060">1-19 MacKenzie Street and 211 Blues Point Road in Lavender Bay</a>, immediately south of Nor​th Sydney Station and between the commercial core and the lower-rise Lavender Bay Heritage Conservation Area.

Designed by Wardle, the proposal would deliver a new residential tower comprising 88 build-to-sell apartments and 19 affordable apartments, alongside a separate co-living building with 57 rooms and a building manager's studio.

It would also see the significant restoration and upgrade of St Francis Xavier Catholic Church, the adaptive reuse of the former school building, new parish facilities, retail, a new public square and around 1,000 sqm of publicly accessible open space.

<img alt="Vinnies North Sydney" data-entity-type="file" data-entity-uuid="d5dd7f87-a617-463e-b577-17541e01f0e9" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-26%20at%209.10.13%E2%80%AFAM.png?VersionId=4R8TsFN3P_LrrXO2HswTOIrx2blil8lh" />

The project is seeking a concurrent rezoning of the site to R4 High Density Residential and an increase in the maximum building height to allow a tower reaching RL120, or up to 20 storeys. The proposal was progressed through the NSW Government's Housing Delivery Authority pathway.

The build-to-sell component will be weighted toward larger apartments, with just six one-bedroom apartments compared with 31 two-beds, 43 three-beds and eight four-bedroom residences.

The 19 affordable apartments will comprise two studios, 15 one-bedroom apartments and two two-bedroom apartments, taking the total apartment component to 107 residences before the 58 co-living rooms are included.

<img alt="Vnnies" data-entity-type="file" data-entity-uuid="7d568ca5-cb90-4e18-96c6-d9795dba0c56" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-26%20at%209.10.05%E2%80%AFAM.png?VersionId=GY2R5M9VtQh0EKy1vajaea19PSLOPuRD" />

Wardle's design for the Vinnies site has sought to negotiate that emerging high-rise context while retaining the lower-scale character of MacKenzie Street and the adjoining heritage conservation area.

The main building adopts a three-storey podium and tower arrangement, with the podium aligned to the ridgeline and front setback of St Francis Xavier Church.&nbsp;Wardle has designed the podium with colonnades, seating, recessed entries and active ground-floor frontages, with sandstone-toned precast concrete and face brick referencing the materiality of the existing church.

The tower then steps back eight metres to the south and six metres to the north before rising in a sculpted form comprising four interlocking quadrants. Wardle has also introduced rounded forms and chamfered corners to reduce the tower's perceived bulk and improve view sharing with neighbouring development sites.

Resident facilities and outdoor areas are planned at the separation between the podium and tower at Level 3, oriented toward Sydney Harbour and the CBD skyline.

The tower itself will feature a glass reinforced concrete facade, with recessed balconies and deep reveals used both to provide shading and privacy and frame views toward the harbour and city. The lower levels take a different architectural approach, using brick and sandstone-toned finishes intended to establish a stronger relationship with St Francis Xavier Church. The Church itself will be conserved and upgraded for its continued use, while the former school building will be adaptively reused as part of the co-living component.

<img alt="Lavendar Bay" data-entity-type="file" data-entity-uuid="2d4418ad-90aa-4d49-af93-c80b140aea80" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-26%20at%209.09.47%E2%80%AFAM.png?VersionId=Kv4gzbsACaGvZSRuaqcfGC54jEJRXIDJ" />

&nbsp;

The proposal adds to an increasingly concentrated pipeline of residential development around Blue Street, MacKenzie Street and Lavender Bay.

Just west of the site, Central Element lodged plans earlier this year for one of the most significant residential developments proposed in Lavender Bay in recent years.

Central Element's SJB-designed scheme at 64-66 Lavender Street and 3-7 Middlemiss Street would deliver 163 apartments across two towers rising 23 and 32 storeys, replacing five existing apartment buildings containing 32 homes. The project also forms part of the Housing Delivery Authority pathway.

<a href="https://www.apartments.com.au/news/nsw/first-look-central-element-reveals-lavender-bay-apartment-plans?utm_source=chatgpt.com" rel="noopener" target="_blank">First look: Central Element reveals Lavender Bay apartment plans</a>

Immediately around North Sy​dney Station, another two significant proposals have emerged at 5 and 15 Blue Street.

Zurich Australian Insurance Properties is seeking to adaptively reuse its longstanding commercial building at 5 Blue Street, directly above North Sydney Station, rather than demolishing the structure.

Its SSDA proposes converting the building into a 14-storey mixed-use development with 62 apartments and 86 co-living rooms, together with ground-floor retail and a major refurbishment of Blue Street Plaza. The application is currently at the Response to Submissions stage.

<a href="https://www.apartments.com.au/news/nsw/first-look-zurich-targets-north-sydney-office-conversion-with-148-unit-proposal-above-metro-station">First look: Zurich targets North Sydney office conversion with 148-unit proposal above Metro station</a>

&nbsp;

Michael Laurence

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