Malaysian developer <a href="https://www.apartments.com.au/developers/s-p-setia">SP Setia</a> is the latest to jump into St Leonards booming Transport Oriented Development precinct.

The developer, which has previously delivered Sapphire by the Gardens apartment development in Melbourne, identified the Atchison Street site in 2023. It filed a Scoping Report around 12 months ago, and now has revealed the designs for the new&nbsp;40-storey mixed-use tower.

The State Significant Development Application covers <a href="https://next-portal.urban.com.au/projects/14650/summary">20-22 Atchison Street</a>, a 1,374 sqm site positioned between St Leonards Station and the new Crows Nest Metro station.

Designed by <a href="https://www.apartments.com.au/architects/cox-architecture">COX Architecture</a>, the project would deliver 181 apartments, above a four-storey commercial podium, five basement levels, and new public domain works along Mitchell Street. The apartment mix comprises 35 one-bedroom apartments, 39 one-bedroom-plus-study apartments, 85 two-bedroom apartments, and 22 three-bedroom residences.

The proposal has been lodged as a shop-top housing development under the NSW Government’s TOD planning pathway, which allows increased density around key transport infrastructure. The site sits within the recently rezoned Crows Nest Accelerated TOD Precinct.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="b799673d-48e2-46b0-801a-0e33a9330100" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/atchinson%20site.png?VersionId=dPh0UfwfaHpbFL1R7H1cbZNbIW0CHbCC" />

SP Setia acquired the Atchison Street site as part of its continued expansion into the Australian apartment market. In comments made to City &amp; Country (The Edge Malaysia) in 2023, SP Setia President and CEO Datuk Choong Kai Wai described the acquisition as “a strategic move” aligned with the group’s post-pandemic market recovery strategy.

“Our target for this exceptional development is local and overseas buyers, including first-home buyers, downsizers and investors,” Choong said.

The tower has been designed as a slender vertical form rising from a mixed-use podium, with COX Architecture positioning the development as a response to the evolving St Leonards and Crows Nest skyline.

“The purpose of the project is to facilitate the delivery of high-quality housing at a strategically located site and deliver a built tower outcome that is consistent with the desired future character of St Leonards and aligns with the TOD controls,” the design report stated.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="b1a85eee-76f7-436c-a6da-73ba827b9b13" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/atchinson%20entry.png?VersionId=dA9jHGPMcm.dDbwk4QfxqWiY5bfh3UVt" />

The podium would incorporate retail uses fronting Atchison Street, commercial tenancies, landscaped communal areas, and pedestrian improvements along Mitchell Street. Vehicle access and loading would be consolidated via Atchison Lane.

Residents would have access to more than 665 sqm of communal indoor and outdoor spaces, while the development proposes 96 parking spaces across five basement levels.

The proposal also includes a commitment for 10 per cent of residential floor space to be allocated toward affordable housing through a monetary contribution.

COX said the tower form responds directly to the emerging high-density character of the precinct while seeking to maximise solar access, cross ventilation, and outlook from apartments.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="2163f85c-f63b-4be3-aafa-f8763976cec5" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Article%20Feature%20Image%20%28Grid%29_5.png?VersionId=WiAmtIKJ6.ZQ41EtYEQ1fol7AeorKBlL" />

“The building is orientated towards north,” the Apartment Design Guide compliance report noted, adding that the tower’s slim form was driven by the constrained inner-urban site dimensions.

The design also incorporates landscaped setbacks and communal open space at podium level, intended to soften the interface with surrounding streets and improve pedestrian amenity.

The project adds to a growing wave of redevelopment proposals reshaping St Leonards and Crows Nest following the opening of the Sydney Metro City line and the NSW Government’s push for higher-density housing around major transport nodes.

Last week Stockland filed plans just down the road. They want to build a <a href="https://www.apartments.com.au/new-apartments/601-pacific-highway-st-leonards-nsw-2065">52-storey tower on Pacific Highway</a>.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-stockland-plans-52-storey-538-apartment-st-leonards-tower">First look: Stockland plans 52-storey, 538-apartment St Leonards tower&nbsp;</a>

Joel Robinson

First look: SP Setia targets St Leonards skyline with 40-storey TOD tower

<a href="https://www.apartments.com.au/developers/urban-property-group">Urban Property Group</a> has revealed plans for a new mixed-use tower at 10 Dangar Street, Wickham, advancing a proposal that would reshape the southern gateway to Newcastle’s city centre with one of the city’s tallest residential buildings.

The State Significant Development proposal, now on exhibition, seeks approval for a <a href="https://www.apartments.com.au/new-apartments/bowline-10-dangar-street-wickham-nsw-2293">43-storey tower</a> immediately adjacent to the Newcastle Interchange. The project would deliver around 200 apartments, including 42 affordable housing dwellings, alongside 99 co-living units, a 171-room hotel, retail space, and new public domain integrated through the site.

The scheme marks a significant escalation of plans previously approved for the site. Urban Property Group took over the prominent 2,904 sqm parcel, where excavation and demolition had already commenced under an earlier consent for a 14-storey mixed-use development.

<img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="58a96dd9-407f-4d20-86b4-94e4bfeef74b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20podium.png?VersionId=LGlf08pdFGAZDzvx_CXC4XakHNZRuEE0" />

Designed by <a href="https://www.apartments.com.au/architects/sjb-architects">SJB</a>, the tower has been conceived as a landmark transit-oriented development anchored to the Newcastle Interchange precinct. The proposal includes 245 build-to-sell apartments across a mix of one, two, and three-bedroom residences, as well as two penthouses. Fifteen apartments and one operational unit are earmarked for NDIS housing. The co-living component would add a further 99 units, while the podium would accommodate retail uses and hotel facilities.

SJB said the site presents “a valuable opportunity to anchor the precinct by setting the standard for design, active ground planes and character at the key southern gateway.”

The architecture responds directly to the site’s position beside major transport infrastructure and within one of Newcastle’s fastest-evolving urban renewal precincts. The tower form sits above a sculpted podium designed to frame new public spaces, including a through-site pedestrian link connecting Station Street to Hannell Street, landscaped plazas, and activated retail edges.

<img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="a7bd6ff0-f7db-4ce8-a6dc-ea56e72c6149" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20lanne.png?VersionId=xzf39VADyhj7zBQY2I9fx9vI62u2tuSb" />

The design report describes the project as part of the broader transition of Wickham into “a vibrant, high-quality mixed-use urban precinct” that leverages proximity to the station, open space, and regional connectivity.

A detailed public art strategy has also been prepared for the development. The strategy positions the project as “a transit-oriented development of state significance at the gateway to Newcastle’s city centre” and outlines a series of integrated artworks responding to Newcastle’s industrial and transport heritage.

Creative Road’s curatorial framework for the project, titled Unveil, draws on “stratified surfaces, carved volumes, and light-filled apertures” while referencing Newcastle’s transformation from an industrial city into a contemporary education and technology hub.

<img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="77a882bb-14b1-4d28-99ff-9438e39508c0" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20site.png?VersionId=cevgo_vN0eKPK78P8YcEu3mKPLkpFqE7" />

The proposal is being advanced through the NSW Housing Delivery Authority pathway after being declared State Significant Development in June 2025. The accompanying scoping report states the development aims to “maximise the site’s proximity to the Newcastle Interchange by delivering transit-oriented development” while increasing housing supply and affordable housing provision within the Newcastle LGA.

Urban Property Group’s plans align with the long-term strategic vision established under the Wickham Master Plan, which identified the interchange precinct as suitable for substantial uplift in height and density. The current proposal would significantly intensify that vision, positioning the tower among the tallest developments proposed for Newcastle.

The site sits immediately north of the Newcastle Interchange, bounded by Dangar Street, Hannell Street, and Charles Street. It is surrounded by a rapidly growing cluster of residential towers and mixed-use projects that have emerged following the completion of the light rail and transport interchange.

First look: Urban Property Group unveils Newcastle’s latest tower at Wickham interchange

Bottega House has completed settlement of a landmark riverfront site in Macquarie Street, St Lucia, representing its first major Brisbane development.&nbsp;

Positioned on the banks of the Brisbane River, the <a href="https://www.apartments.com.au/new-apartments/180-macquarie-street-st-lucia-qld-4067">premium site at 180 Macquarie Street</a> features uninterrupted river frontage in one of Brisbane’s most tightly held residential precincts.&nbsp;

The proposed development, currently under assessment with Brisbane City Council, has been designed by <a href="https://www.apartments.com.au/architects/plus-studio">Plus Studio</a> with interiors by <a href="https://www.apartments.com.au/interior-designers/mim-design">Mim Design</a> and will deliver a boutique collection of premium residences positioned specifically for owner occupiers and downsizers.&nbsp;

The residences are set to redefine luxury apartment living in the area, with a focus on architectural quality, refined finishes, landscape integration and elevated amenities including curated wellness facilities, resort-style pools and recreation spaces rarely seen in the local market.&nbsp;

Exclusive sales for the project will be led by Keenan &amp; Byrne, ahead of an anticipated launch later this year.&nbsp;

Bottega House Managing Director Nick Malloch said the project reflects the group’s ambition to deliver a highly curated residential offering within one of Brisbane’s most tightly held precincts.&nbsp;

“This is an incredibly rare riverfront opportunity and one we have approached with a long-term perspective,” Malloch said.&nbsp;

“Our vision from the outset was to create a boutique collection of residences that feel more like private homes than traditional apartments, with generous proportions, refined finishes and exceptional amenity throughout."

Malloch says there is a&nbsp;lack of premium owner-occupier stock of this quality in the market, particularly for downsizers wanting space, privacy and a true lifestyle offering without compromise.&nbsp;

"Demand is expected to be strong given the scarcity of premium riverfront opportunities of this nature within Brisbane’s inner-west."&nbsp;

Bottega House secures landmark riverfront site in St Lucia 

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The arrival of the first piling rig officially marks the commencement of construction at SIERA’s new beachside apartment development, Exhale, in Northcliffe.

<a href="https://www.apartments.com.au/new-apartments/exhale-surfers-paradise-8-enderley-avenue-surfers-paradise-qld-4217">Exhale</a>, a glass-encased tower featuring 54 large-scale apartments at 8 Enderley Avenue, is SIERA’s third Gold Coast development. It follows the recently completed PIPIS Bilinga beachfront project, which achieved suburb-record prices, and the soon-to-be-completed Chevron Island development, Tapestry.

[smartcode_project:default project_id=112661 project_image_fid=359603]

<a href="https://www.apartments.com.au/developers/siera">SIERA</a> Founder and Managing Director Brent Thompson said the arrival of the piling rig represented a significant milestone for the development, which is scheduled for completion in late 2028.

Over the next month, around 260 piles are expected to be installed as work progresses on the basement structure. The building is anticipated to rise above ground level early next year, before unveiling its sculptural glass curtain wall, developed in collaboration with specialist façade engineers.

“The façade was designed to maximise panoramic coastal views while creating a distinctive architectural identity,” Thompson said.

[smartcode_project:default project_id=112661 project_image_fid=355935]

Designed by BDA Architecture, Exhale will comprise just 54 two- and three-bedroom residences across 26 levels, a level of low-density living rarely delivered in this beachside pocket between Surfers Paradise and Broadbeach.

The project has been conceived as a resident-only building, with no short-stay accommodation permitted. SIERA says the model is intended to appeal to long-term owner-occupiers rather than transient holiday demand.

[smartcode_project:default project_id=112661 project_image_fid=361052]

Residences have been designed with large-format layouts and expansive glazing, with most apartments featuring more than 30 metres of glass frontage to maximise natural light and ocean views.

The amenity offering spans two levels and centres on wellness and lifestyle, including a heated magnesium pool, sauna, yoga and Pilates studio, gymnasium, private dining facilities, cinema lounge, and dedicated surfcraft storage.

[smartcode_project:default project_id=112661 project_image_fid=359607]

More than half of the apartments have already sold. SIERA has also opened a sales gallery for Exhale at its Chevron Island commercial premises, near its Tapestry tower and the site of its second Chevron Island apartment development, which is slated to launch in early 2027.
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</section>

[smartcode_project_cta:default project_id=112661]

SIERA kicks off construction at Northcliffe tower Exhale

Local Little Bay residents, along with buyers from premium postcodes across Sydney’s affluent Eastern Suburbs, have dominated purchases in developer-builder Urban Property Group’s first Eastern Suburbs apartment development, <a href="https://www.apartments.com.au/new-apartments/este-little-bay-jennifer-street-little-bay-nsw-2036">ESTE Little Bay</a>.

The $250 million coastal project, one of the first new developments in the area in several years, has proven particularly popular with downsizers, especially those from Coogee and Bondi. One Double Bay downsizer paid $4.7 million for a four-bedroom penthouse, setting a new local apartment price record in the process.

Buyers have been attracted to the combination of coastal tranquillity, premium design and amenity-rich neighbourhood living. The walkable village setting, along with proximity to three of Sydney’s leading golf courses, New South Wales Golf Club, St Michael’s Golf Club and The Coast Golf Club, has also been a key drawcard.

[smartcode_project:default project_id=112343 project_image_fid=352689]

Built across two low-rise buildings designed by <a href="https://www.apartments.com.au/architects/hill-thalis-architecture-urban-projects-pty-ltd">Hill Thalis</a> and set along a lush, landscaped green spine, designed by leading landscape architect <a href="https://www.apartments.com.au/landscape-architect/arcadia-landscape-architecture">Arcadia</a>, ESTE Little Bay offers a collection of one, two, three and four-bedroom residences with interiors by Richards Stanisich.

<a href="https://www.apartments.com.au/developers/urban-property-group">Urban Property Group</a> Sales Director, Tom McIvor said the response to ESTE has been "nothing short of extraordinary."

“Buyers have been quick to recognise ESTE as a rare opportunity to invest in a coastal sanctuary that offers both seclusion and connectivity to the heart of Sydney,” McIvor said.

[smartcode_project:default project_id=112343 project_image_fid=352687]

<a href="https://www.apartments.com.au/project-marketer/srm-residential">SRM Residential</a> Senior Director, <a href="https://www.apartments.com.au/project-marketer/srm-residential">Clayton Ross</a> said the local market has responded incredibly well, driven by ESTE’s exceptional location and the rarity it offers.

“We’ve seen strong interest from a variety of buyer groups, all of whom are drawn to the exclusivity and quality of the build and construction by the 4.5-star iCIRT-rated builder / developer, Urban Property Group. There’s truly nothing else like it along Sydney’s coastline.”

[smartcode_project:default project_id=112343 project_image_fid=352690]

The project also includes robust buyer protections, including Resilience Insurance’s Latent Defects Insurance, providing 10 years of structural cover, and an independent iCIRT-rating of the developer.

“The iCIRT-rating adds another layer of confidence,” Ross added. “Buyers see it as a safeguard for their investment and their lifestyle.” A highlight of ESTE’s offering is its exclusive wellness amenities, including a heated rooftop infinity pool and outdoor heated spa, a state-of-the-art Technogym fitness centre, and a sauna.

<a href="https://www.apartments.com.au/new-apartments/este-little-bay-jennifer-street-little-bay-nsw-2036">ESTE Little Bay</a> is topped out and is on track to complete towards the end of 2026, with residents moving in before Christmas.

[smartcode_project_cta:default project_id=112343]

Eastern Suburbs buyers snap up ESTE Little Bay apartments

Sydney’s property market is known for high prices, competitive bidding, and mounting pressure on first home buyers. But change is on the horizon.

From late 2025, eligible first home buyers in New South Wales will have access to a new federal government initiative aimed at addressing affordability: the Help to Buy Scheme.&nbsp;

<h2>What is the Help to Buy Scheme?</h2>

The program introduces a shared equity model intended to reduce the upfront cost of entering the property market, particularly in high-demand urban areas such as Sydney.

The scheme operates under a shared ownership structure in which the federal government takes an equity stake of up to 40 per cent for new homes, or 30 per cent for existing dwellings. This arrangement allows eligible buyers to significantly reduce their loan size and avoid the added cost of Lenders Mortgage Insurance (LMI).

Under this model, purchasers can enter the property market with as little as a two per cent deposit, well below the traditional 10 to 20 per cent usually required. The government’s contribution is not a loan but a co-ownership stake in the property. As such, there is no interest or rent charged on its portion.

Because the government’s equity combined with the buyer’s deposit typically meets or exceeds the 20 per cent threshold, LMI does not apply. The remaining balance, generally between 60 and 70 per cent of the property’s value, is financed through a standard home loan with a participating lender.

The government's equity in the property remains in place until the buyer chooses to repay it voluntarily or until the property is sold. Buyers can buy back the government’s share over time, in increments of at least five per cent, depending on their financial situation.

There is no fixed repayment timeline, but the amount to be repaid will be based on the property's market value at the time of repayment, not the original purchase price.

<h2>How do you qualify for the&nbsp;Help to Buy Scheme?</h2>

To qualify for the Help to Buy Scheme, applicants must meet the following conditions:

<ul>
	<li>Be an Australian citizen at least 18 years of age.</li>
	<li>Be a first-home buyer who does not currently own property.</li>
	<li>Intend to live in the property as their primary residence.</li>
	<li>Earn less than $100,000 per year for individuals, or $160,000 for couples.</li>
	<li>Purchase a property within the regional price caps, currently $950,000 in Sydney, though this is expected to rise to approximately $1.3 million ahead of the program’s launch.</li>
</ul>

While the Help to Buy Scheme does not solve affordability challenges across the board, it does offer a more accessible pathway for a defined segment of the market, particularly younger buyers with moderate incomes who have been priced out of traditional lending routes.

The scheme is expected to commence in NSW in late 2025, as part of a national rollout.

Under the new model, purchasers can enter the property market with as little as a two per cent deposit, well below the traditional 10 to 20 per cent usually required

Help to Buy Scheme: What first home buyers in NSW need to know

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There has been widespread publicity recently about Australians investing their super in geared residential property. Much of this publicity has centred on schemes being promoted involving self managed superannuation funds (SMSFs) and has attracted comment by ASIC and more recently the Reserve Bank.  
When using  an SMSF to invest in property the common mistakes being made are:  
<ul>
<li>
Not having enough super to start with and then having to excessively gear the property;  
</li>
<li>
Creating a super fund which just has a single asset;  
</li>
<li>
Buying the property before the structure is organised;  
</li>
<li>
Not having a plan about how the debt will be repaid;  
</li>
<li>
Investing in off the plan residential developments which generally increase the risk factor;  
</li>
<li>
Not thinking about the wide range of property options there are.  
</li>
</ul>
When properly researched and properly structured an SMSF investment in direct property (including gearing) can work very effectively. But most SMSF trustees generally focus on residential property and not other forms of property. Why not office, retail or industrial?  
An SMSF could directly acquire for example a small factory, a shop or an office. There are also other alternatives such as property syndicates and single property trusts which tend to focus on office buildings.  
A residential property investment may deliver around 5% rental income and usually this reduces to 4% or lower after expenses including property management costs. To make the gearing work you need to have an expectation of sound capital growth on top of this but this has been quite low over recent years.
With offices, factories and retail you would normally expect the income return to be significantly higher than residential property and this generally comes at the expense of a lower capital growth expectations. Income yields would normally be in the 7% to 9% range depending on the type and location of property.  
In times of low interest rates, cash rates at 2.5% and the prospect of medium term low rates, getting an income return of around 7% plus from shops, offices etc starts to look quite attractive particularly if you can minimise the risks with the investment. As with residential property a good tenant is highly important and the key with commercial property is to have a plan to be able to tweak the property to generate higher rental yields.  
One of the benefits of using non-residential property in an SMSF is that you can use your business entity to become the tenant - something you can’t do with residential.  
SMSF trustees should therefore think outside the box in these times of low growth, low inflation and low rates and higher yielding property is one of those key considerations. But do your research and importantly have a plan of how any debt will be repaid.
 
<hr>
 John McIlroy is executive director of <a target="_blank" href="https://www.crystalwealth.com.au/">Crystal Wealth Partners Ltd</a>
 
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SMSFs should consider commercial property investments: John McIlroy

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The recent ASIC review of SMSF advice revealed a number of areas for improvement in the advice-giving process.
Given the risks associated with a DIY option, ASIC has issued guidelines on the things advice providers and investors should discuss and consider before setting up an SMSF.
They outline some practical tips that advice providers can use to improve the quality of SMSF advice they provide to investors.
ASIC set out a scenario as to appropriate advice when it came to a SMSF investing in shares:
An investor approached an advice provider about purchasing listed shares with their superannuation.
The investor’s existing superannuation fund did not provide this option so the investor sought advice about an appropriate alternative that would allow them to purchase listed shares.
The investor undertook their own research and selected a portfolio of blue chip shares that they intended to buy and hold as a long-term investment.
The advice provider determined that the investor was not nearing retirement and was correctly prioritising the repayment of their mortgage.
The advice provider appropriately scaled the advice to the recommendation of a superannuation account that suited the specific needs of the investor.
Commentary:
The advice provider determined that the needs of the investor were not complex and identified an APRA-regulated superannuation fund that offered all of the features that the investor required at a competitive price.
The advice provider also considered an SMSF for the investor, but decided that it would not be suitable, given that the investor was looking for a simple option and had no desire to be actively involved in the administration of the fund.
The advice provider appropriately recommended the APRA-regulated fund to the investor.
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ASIC advisory: purchasing shares with superannuation

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The recent ASIC review of SMSF advice revealed a number of areas for improvement in the advice-giving process.
Given the risks associated with a DIY option, ASIC has issued guidelines on the things advice providers and investors should discuss and consider before setting up an SMSF.
They outline some practical tips that advice providers can use to improve the quality of SMSF advice they provide to investors.
ASIC set out a scenario as to appropriate advice when it came to a SMSF investing in real property:
A couple in their early 50s received advice on establishing an SMSF.
The advice provider discussed the various investment options and asset classes available to the SMSF.
The investors informed the advice provider that they were experienced real property investors, having acquired three investment properties in their personal name, and that they now wished to use their superannuation savings to purchase a further investment property with the assistance of gearing.
The advice provider undertook further inquiries and determined that the investors:
• owned their home outright and had no dependants;
• had an investment property portfolio totalling $1 million, with investment loans of $800,000 and 20 years remaining on the term of the loans;
• had combined superannuation totalling $200,000 to which they only contributed superannuation guarantee contributions;
• earned a combined annual income of $120,000 which only just covered their annual living expenses, tax and the commitments for their investments; and
• intended to retire in 10 years time with a retirement income of $60,000 per year in today’s dollars.
The advice provider immediately identified the following issues for the investors:
• they had no budget, which was limiting their ability to contribute to superannuation and accumulate retirement savings;
• they had no plan in place to repay their investment loans before retirement;• the establishment of a real property investment in the SMSF would further increase their outstanding debt and concentrated investment exposure to direct real property; and
• to retire in 10 years with an annual retirement income of $60,000 in today’s dollars, they would require retirement savings of around $1.5 million in 10 years time.
Following a discussion with the investors, it was decided that the SMSF real property investment was not appropriate for the investors.
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Getting the best advice on SMSF investing in real property: ASIC scenario

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Investors should expect regulations that allow self-managed superannuation funds to borrow to buy property to come under government scruitiny in the coming months, an expert in the area has said.
In February, Assistant Treasurer Arthur Sinodinos ruled out a specific review into limited recourse borrowing arrangements which SMSFs use when taking out loans to buy property.
Macquarie Bank executive director David Shirlow told Property Observer it was unlikely that the government would change its position, despite Senator Sinodinos standing aside and Finance Minister Mathias Cormann taking over as Acting Assistant Treasurer.
“Whilst the prospect of a separate and specific review of the matter is off the policy agenda for the time being, there are still some live policy issues in borrowing through super,” said Shirlow, who specialises in SMSFs and sits on the board of the SMSF Professionals’ Association of Australia (SPAA).
He said some stakeholders had argued that it was inappropriate for SMSFs to borrow for property investment at all, and that further constraints on advice provided regarding limited recourse borrowing arrangements and product offerings could be considered.
The arrangements are likely to be examined as part of the Financial System Inquiry, which is due to publish an interim report in mid-2014 and a final report by November.
Numerous submissions to the Inquiry have called for government to review SMSF borrowing and put in place additional consumer protection measures and education for trustees.
Big four accounting firm KPMG noted in its submission that super funds were tax-exempt in the pension phase, which provided incentives for SMSFs to invest in long-term assets such as residential property, and even more so if the property was negatively geared.
The Institute of Chartered Accountants in Australia strongly encouraged a review of existing arrangements to ascertain whether borrowing was appropriate and, if it was, to ensure the right legislative and regulatory frameworks were in place.
Mid-tier accounting firm Chan &amp; Naylor called for urgent action to create a dedicated national SMSF educational framework, lead by the Australian Securities and Investments Commission (ASIC), to teach the public about the merits and pitfalls of SMSF investments.
The Reserve Bank of Australia noted that SMSFs borrowing could expose members to greater financial risks (including excessive concentration in a single asset) than they understood they were taking.
CPA Australia raised concerns about the appropriateness of advice received by SMSF trustees and members, and potential misinformation being provided by unlicensed advisers such as real estate agents, mortgage brokers and property developers.
Shirlow said ASIC considered itself to have jurisdiction, under the Corporations Act, over some aspects of property sales people giving advice on limited recourse borrowing arrangements.
“Stakeholders such as SPAA would argue that there should be some more definite consumer protection rules in place to make sure that property spruiking is not going to lead to disaster,” he added.
The Association of Superannuation Funds of Australia has previously advocated for advice to SMSFs on asset classes such as investment property and limited recourse loans to be provided only through licensed financial planners.
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Investors should expect SMSF borrowing to come under greater government scrutiny

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The Australian Taxation Office plans to clamp down on self-managed super fund trustees who move their assets around before selling them to avoid capital gains tax.
In a draft ruling issued last week, and open for public comment until September 4, the ATO said that from July 2014, SMSF trustees will have to obtain an actuarial certificate to claim the pension income-tax exemption, or entirely segregate their SMSF fund assets into those that are in the accumulation phase and those that bear liability for their current pension.
Failure to do so could result in the ATO pursuing them under tax avoidance provisions.
Currently, SMSF assets used to pay out pensions are tax-exempt, whereas assets that don’t currently have any pension liability still incur capital gains tax.
The ATO also flagged its concern about trustees moving assets from the accumulation to the pension stage before selling them to avoid capital gains tax.
“If an asset is purported to be segregated [i.e. claimed to be in the pension phase and thus tax-exempt] shortly before disposal, and then disposed of in circumstances where a capital gain is claimed to be exempt income, it will be a question of…whether it was invested or otherwise being dealt with for the sole purpose of enabling the fund to discharge liabilities in respect of superannuation income stream benefits,” the ATO’s draft ruling stated.
The ruling will have broad implications, as most self-managed super funds both distribute pensions and accumulate superannuation, AMP SMSF head of policy and technical Peter Burgesssaid. This can be for multiple members or for the same member if they are still working past the age where they get access to their super.
“What the ATO talked about is if you want your fund to be treated as a segregated fund, you have to ensure that your assets are entirely segregated,” he says.
“They used examples where you could have a property within a self-managed super fund and say a certain proportion of that property is tax-exempt as it’s in the pension stage and the rest is within the accumulation stage, and try to treat the fund as segregated.
“The ATO says they don’t think that suffices. You need to make sure that if it’s a property, it either sits entirely within the pension pool, or you treat it as an unsegregated fund, in which case you need an actuarial certificate to determine which parts are tax exempt and which parts are not. None of this business where you say it’s segregated when it’s not to avoid the cost of an actuarial certificate.”
The ATO is obviously also concerned about individuals wanting to use the tax-free provisions surrounding pension assets to avoid capital gains tax, Burgess says, “which they would do by transferring an asset from the accumulation part of the portfolio to the pension part and then selling it shortly after”.
However, Burgess said the ATO did not define what “shortly after” meant, and so it remains unclear how long an asset must be held so as to not flag alarm bells with the taxman.
Aside from property, other assets likely to be affected by the change are things like joint bank accounts.
This article originally appeared on <a target="_blank" href="https://www.smartcompany.com.au/">SmartCompany</a>.
 
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ATO set to clamp down on SMSF trustees who move assets to avoid capital gains tax

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Rents are concessionally-taxed at 15% while capital gains are taxed at an effective 10% during your fund’s accumulation or saving phase if the property is held for more than 12 months.
And once the property is backing the payment of a superannuation pension, fund income and capital gains are tax-free under current law.
This means that your SMSF may eventually be able to sell a property in the pension phase without paying any CGT on the profits.
The Labor Government had proposed to tax annual earnings of more than $100,000 from superannuation assets supporting a pension.
However, the legislation wasn’t passed before federal Parliament went into its pre-election recess.
SMSFs in the accumulation phase are entitled to claim the same types of tax deductions as individual investors who buy properties in their own names.
For instance, an SMSF can claim deductions for loan interest, repairs and depreciation, and for any shortfall between the deductible expenses and the rent.
But it is crucial not to overrate the benefits of negative gearing through an SMSF.
 
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This article is part of the <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 tax treatment of SMSF property

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Assets held in a super fund are legally inaccessible to trustees in bankruptcy – provided contributions or asset transfers were not made with the “main purpose” of avoiding creditors.
This makes super such a prized method of asset protection, particularly as there is no dollar limit on the protection.
Many small-medium business owners, for example, place their busines spremises in an SMSF partly as an asset protection strategy.
Take the example of husband-and-wife business partners who currently own business premises in their own names.
Depending upon the circumstances (including any professional advice received), this couple may decide to either sell the property to their SMSF at market value or make a non-cash contribution of the property to the fund.
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This article is part of the <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 know the asset-protection advantages of SMSF property

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The Australian residential property market is the largest domestic asset class, with an aggregate total value estimated at $4.2 trillion. The investor segment, where the occupants are renters with a private landlord, represents 23.7% of Australia’s 8,711,000 total occupied private dwellings. Investors equate with a market value of $985 billion. Owner occupiers retain the majority of ownership of residential property in Australia.
While the total size of residential asset class dwarfs the Australian share market (around $1.4 trillion), fixed interest market (around $1.2 trillion) and commercial property market (around $600 billion), there has been almost no investment in residential property from institutional superannuation. There has however been considerable interest in residential property from SMSFs.
The steady growth in residential property assets and total assets within SMSFs over the past five years is shown in the chart below.
SMSFs - Residential property and total assets
Click to enlarge
<a title="Click to enlarge" href="/images/stories/2013/08/easton-chart-aug-30-big.png" rel="shadowbox"><img src="/images/stories/2013/08/easton-chart-aug-30-small.png"></a>
ABS – Australian Social Trends – Housing, National Summary, 1998–2012
As shown in the chart above, SMSF investment in residential property has been growing in-line with total assets. At March 31 2013 the value of residential property assets in SMSFs was just over $17 billion, representing approximately 2% of the value of total residential property investment.
Trustees of SMSFs may be attracted to residential property for a number of reasons. There is the familiarity with the asset class for most Australians either through owning their home or investment property or both.
Property is a tangible asset that can be researched online and is accessible. Prospective investors can visit the site to gauge the desirability of the location, the likelihood of attracting good tenants and for the potential for increase in value over time. Residential property may be attractive for trustees of self-managed superannuation funds as it enables some level of participation in management of the asset that is absent from most other asset classes.
A key driver of SMSF investment into residential property is the ability to borrow, within quite strict rules, to purchase property within superannuation. Limited recourse borrowing arrangements allow trustees to purchase an asset of greater value than would be otherwise possible with an outright purchase using equity. There are costs involved in setting up a holding trust for the asset and trustees also need to consider a range of risks of investing in residential property such as tenancy risk and whether there would be appropriate diversification within the fund.
Institutional superannuation funds have not invested in residential property due to a number of factors. Residential property tends to have a significantly lower yield than commercial property which the larger funds have the scale to invest in while SMSFs do not. Commercial property also offers tenant diversification which individual residential property does not.
The lack of a geographically diversified portfolio of sufficient size to have a meaningful impact on the return characteristics of the fund as a whole has inhibited institutional investment. An efficient management structure for an asset class that requires intensive management would also be required for institutional superannuation funds to invest in Australian residential property.

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Paul Easton is a senior analyst at <a href="https://atchison.com.au/" target="_blank">Atchison Consultants</a>
 
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Why SMSFs invest in residential property and institutional superannuation funds do not: Paul Easton

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Australia: Boom to bust author Lindsay David posed an interesting point of discussion yesterday evening, wondering what the effect of macro prudential measures may be on self managed super funds with residential property investments.
<img src="/images/2014/10/1/Picture%2017.png" alt="">
Jordan Eliseo, chief executive of ABC Bullion, tweeted back “problem is mate that MP won't hurt SMSF's or Foreign HNWs - they can afford 20% deposits no worries. MP will only hurt FHBs I fear”, to which David noted that the question is how it affects demand.
Peter Fraser from Brisbane Business Finance noted that residential investment in SMSF isn't usually the best anyway, and is often a decision by the beneficiary for a retirement house, not for growth.
David expects it to play out before the end of 2017.
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SMSF and macro prudential: Tweet of the day

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Being the trustee of a self-managed super fund (SMSF) gives you the opportunity to manage your own superannuation investments and make your own investment choices.
As the trustee and member of a SMSF, you can have full control over how your retirement savings are invested, whether you want returns from property, shares or even art and collectables.
If you’re thinking of setting up a SMSF, your duties as a trustee will include devising an investment strategy, accepting contributions and paying benefits.
The Australian Taxation Office (ATO) is the authority of SMSFs, enforcing the majority of regulations and restrictions that apply to the investment strategy. This morning Peter Iordanidis of the ATO provided an overview of SMSFs for trustees. 
Some top tips to ensure your fund is compliant:
<ol>
<li>
 Understand the sole purpose of your fund As a trustee, you must ensure that the sole purpose of your SMSF is to provide for its members in retirement. Even if you use a professional to do certain tasks on your behalf, you still must comply with super and tax laws to protect your members’ assets. To ensure that you get the full tax concessions available to SMSFs, you must pass the sole purpose test. Your investment decisions should be based on increasing returns to your fund. You need to consider diversification, risks and likely returns from your assets. You also need to consider your members’ needs and circumstances – even if you are the only member. For example, if you’re nearing retirement age, you may want to change your SMSF asset mix to include more low risk, low reward investments.  
</li>
<li>
Make sure you don’t get any benefit pre-retirement… With post-retirement benefits the sole purpose of your SMSF, you must ensure that you don’t use the fund to get any current day benefits, or you face penalties including the loss of your tax concessions, fines up to $220,000 or up to five years’ jail time. Trustees are prohibited from dipping into their funds to pay for bills, school fees or for any non-retirement investments. As a trustee you are prohibited from borrowing money from the SMSF pre-retirement (with some exceptions) and all transactions made with your SMSF must be made “at arm’s length”. Trustees must make and maintain investments on a strict commercial basis, while the purchase and sale prices of fund assets should always reflect true market value. You can use your SMSF to invest in a wide variety of assets, even art and collectables. You can use your fund for artwork and collectables, but you cannot enjoy a direct or indirect benefit from the investment by displaying it in your home or business prior to retirement. 
</li>
<li>
…And your family doesn’t either A fund is prohibited from lending money to a member of the fund or a relative of a member. The definition of relative is quite broad – this can include siblings, parents, children, and extended family members. The definition also covers the spouse of any family members. That means that you can’t lend money from your SMSF to your sister-in-law. Your SMSF is also prohibited from providing financial assistance to a member or a member of a relative, whether directly or indirectly. This means can’t use your SMSF as security for your child’s mortgage. Iordanidis provided the example of a husband and wife who were trustees of their SMSF. Their SMSF sold a property it owned, but no money was paid for the property, as the sale contract created a loan between the fund and the purchasers. However, it turned out that the purchasers were relatives of the husband and wife, which meant that they had made a loan to family members. The trust incorrectly advised the ATO that the loan was repaid in full, and the fund was deemed non-complying and stripped of its tax concessions. Trustees are generally prohibited from acquiring non-cash assets from related parties – a rental property, for example. 
</li>
<li>
Do your paperwork (or get someone else to do it for you) As a trustee for a SMSF, you have a range of annual responsibilities. You must keep your records up to date and value assets at their current market value at least once a year. You have to prepare financial statements, lodge an annual return and report contributions, even if no contributions were made that year. You’ll also need to lodge an income return every year from the year you set up your fund, for each member. Most of those duties can be performed by an accountant, but it’s your responsibility to make sure they are done and lodged with the ATO. The ATO also requires an audit of your SMSF each year, performed by an approved SMSF auditor who is registered with ASIC and has a SMSF Auditor Number. The auditor can’t be a trustee member of the fund, or your accountant who prepares your other financial statements. You’ll also need to make sure you appoint the auditor early enough for them to do the audit and for you to submit it.  An audit is required even if you haven’t made any contributions in the year.  When you engage professionals, make sure you have a clear understanding of their responsibilities. Any contraventions of super or tax law that are identified by your auditor must be fixed. You can ask the ATO for advice on how to go about rectifying any mistakes you’ve made.
</li>
</ol>
There are a range of other rules and regulations surrounding SMSFs that you need to know to receive full tax concessions (and avoid penalties). Go to the <a href="https://www.ato.gov.au/" target="_blank">ATO's website</a> to learn more.
YOU MAY ALSO LIKE TO READ:
<a href="/guides/ato-cast-doubts-on-smsf-property-zero-interest-loan-strategy">ATO cast doubts on SMSF property zero interest loan strategy</a>
<a href="/guides/taxing-times-for-self-managed-super-funds">Taxing times for self-managed super funds</a>
<a href="/guides/investors-should-expect-smsf-borrowing-to-come-under-greater-government-scrutiny">Investors should expect SMSF borrowing to come under greater government scrutiny</a>
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