Apartment buildings are increasingly being designed around how people actually live day to day, not just how they want a building to look.

For buyers, that shift is showing up in practical inclusions that respond to changing habits. Work-from-home spaces, EV charging, wellness amenities, secure bike storage and parcel management are becoming part of the broader apartment conversation, reflecting a move toward buildings that reduce friction in everyday life.

Online shopping has become one of the clearest examples of that change.

Australians spent a record $82.6 billion online in 2025, with nearly one in four retail dollars now spent online. That has made parcel delivery a regular part of apartment living, rather than an occasional inconvenience.

For apartment residents, however, the delivery process can be less straightforward than it is for detached homes. Parcels may be left in lobbies, redirected to Post Offices, missed entirely, or placed under the responsibility of building managers and concierge teams.

That is why secure parcel infrastructure is increasingly being considered alongside more familiar apartment amenities.

<iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="" frameborder="0" height="315" referrerpolicy="strict-origin-when-cross-origin" src="https://www.youtube.com/embed/-VjjLwoViX0?si=A3k7ws9NX35Uac7_" title="YouTube video player" width="560"></iframe>

Australia Post Parcel Lockers offer one way to address the issue. When a parcel arrives, residents receive a notification through the AusPost app or SMS, then collect it using a QR code or one-time PIN. The parcel is kept secure, accessible and removed from common areas.

The broader Parcel Locker network now includes more than 1,500 locations across Australia, positioned at Post Offices, shopping centres, supermarkets, transport hubs and other accessible locations.

For new apartment projects, the relevance is clear. A building’s amenity offering is no longer only about lifestyle spaces, but also about convenience, security and functionality.

As buyer expectations evolve, secure parcel delivery is becoming part of the same design conversation as flexible working, sustainable transport and resident wellbeing.

It is one less thing for residents to worry about, and another example of apartment design adapting to the way Australians now live.

Joel Robinson

Apartment design is adapting to the way Australians shop

While school holidays and trips to Europe tend to define the winter property market, there's been no cold snap at <a href="https://www.apartments.com.au/new-apartments/the-walden-north-sydney-177-walker-street-north-sydney-nsw-2060">The Walden</a> in North Sydney.

Developer-builder&nbsp;<a href="https://www.apartments.com.au/developers/aland">ALAND</a> sold more than $35 million worth of apartments throughout June, including a $6.8 million apartment that now ranks among the highest apartment sales ever recorded in North Sydney.

SRM Residential agent Ben Stewart said buyer demand throughout June reflected a mix of improving market confidence and longer-term thinking from owner-occupiers.

"We're seeing strong demand from owner-occupiers who are taking a longer-term view," Stewart said.

"Many recognise the opportunity to secure an apartment in an iconic building and premium location while values remain attractive. They may initially lease the property, but the intention is to eventually move in themselves, rather than purchasing purely as an investment."

[smartcode_project:default project_id=134323 project_image_fid=367129]

Located at 177 Walker Street, The Walden will deliver 161 one, two, three and four-bedroom residences across a 30-storey tower designed by Rothelowman. Every apartment occupies a corner position, maximising natural light, cross ventilation and views across Sydney Harbour, the Opera House, Sydney Heads and the northern districts.

Rather than a traditional balcony, the residences feature winter gardens that seamlessly extend the open plan living areas, creating versatile spaces for relaxing or entertaining throughout the year. Floor-to-ceiling glazing draws in natural light while showcasing sweeping views from the building's elevated Walker Street position.

Every apartment features high-end Calacatta marble, bespoke joinery, and fully integrated appliances.

The larger residences have been planned with distinct entertaining and private zones, with many master suites positioned on corners to capture natural light and harbour views. Walk-in dressing rooms, freestanding baths and refined stone finishes reinforce the house-like feel that has resonated with downsizers and owner-occupiers.

[smartcode_project:default project_id=134323 project_image_fid=6393]

Rothelowman Principal Ben Pomroy said the project was designed to make the most of its unique position overlooking the harbour.

"The Walden is a celebration of all things beautiful, curated for those who expect nothing less than exceptional," Pomroy says.

"Meticulously designed entertaining spaces and light-filled living areas that capitalise on capturing the natural beauty of Sydney's iconic harbour."

Residents will also have exclusive access to The Pavilion, a dedicated amenity building featuring a rooftop pool, wellness studio, gymnasium, sauna, concierge service, residents' lounge, private dining spaces and work-from-home facilities.

[smartcode_project:default project_id=134323 project_image_fid=6402]

The project marks ALAND's first major luxury apartment development in Sydney's inner-city market after more than two decades delivering residential communities across Greater Sydney.

Founder and CEO Andrew Hrsto previously said the rarity of the Walker Street site made it an opportunity the company could not overlook.

"This is a rare opportunity to bring a truly exceptional project to life in one of Sydney's most iconic locations, and to showcase our craftsmanship and design expertise at a world-class level," Hrsto said.

[smartcode_project:default project_id=134323 project_image_fid=6383]

The Walden has been introduced to the market at a time when demand for living in North Sydney is at an all-time high. Billions of dollars have been invested in infrastructure, including the recently opened Victoria Cross Metro station, located just 300 metres from The Walden, providing residents with direct access to the Sydney CBD in just minutes.

Private investment has also transformed the area through the arrival of new retail and dining destinations, elevating the lifestyle offering in what was once considered primarily a commercial precinct rather than an aspirational residential address.

The Walden is currently under construction and is scheduled for completion in 2028.

[smartcode_project_cta:default project_id=134323]

ALAND records $35 million in sales in North Sydney as The Walden bucks quiet winter selling season

The long-awaited redevelopment of the former Eastlakes Shopping Centre site has reached a major milestone, with Conquest's plans for a new mixed-use precinct officially placed on public exhibition.

The State Significant Development Application would transform the 1.7-hectare site at <a href="https://www.apartments.com.au/new-apartments/19a-evans-avenue-eastlakes-nsw-2018">19A Evans Avenue</a> into one of Sydney's largest urban renewal projects, delivering 736 apartments above a new shopping centre anchored by Woolworths, alongside specialty retail, dining, commercial space and new public open spaces.

The public exhibition marks the next chapter for the project after <a href="https://www.apartments.com.au/developers/conquest">Conquest</a> acquired the stalled Stage Two development from Crown Group, who completed the first stage across the road prior to their voluntary liquidation.

<img alt="First look: Conquest unveils plans for 736-home Eastlakes Shopping Centre redevelopment" data-entity-type="file" data-entity-uuid="5fca22c5-d1ed-4e2c-8801-03f7df1eafc8" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/eastland%20podium.png?VersionId=uomwr41nF8CmLUZRDcu3mHQechlbxucS" />

&nbsp;

Designed by DKO Architecture, the proposal comprises four residential buildings ranging from 14 to 18 storeys above a two-level retail podium. The development would deliver 736 apartments, including 74 affordable homes, 215 Build-to-Rent apartments and 521 market residences. Provision has also been made for dual-key apartments, which could increase the total number of dwellings to 877.

At ground level, the shopping centre has been designed as the suburb's new meeting place, anchored by a full-line Woolworths and complemented by a curated mix of fresh food retailers, cafés, restaurants, health services and everyday convenience shopping. Generous pedestrian links and landscaped public spaces will connect the retail precinct through to Jack Mundey Reserve, creating a more walkable and connected neighbourhood.

Conquest CEO Michael Akkawi said the redevelopment was about far more than replacing a shopping centre.

"Eastlakes has been overlooked for too long, and this is the community’s moment. We are building a shopping centre and homes, a genuine heart for the suburb, and we genuinely want locals to help shape it."

"We enrich communities through the creation of homes, places, and experiences designed for life, built to last, and owner for generations. That starts with listening, so we warmly encourage everyone with a connection to Eastlakes to view the plans and share their thoughts."

<img alt="First look: Conquest unveils plans for 736-home Eastlakes Shopping Centre redevelopment" data-entity-type="file" data-entity-uuid="22f6fb20-54fb-4bd7-8a92-48fafdd00608" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/eastland.png?VersionId=cugp7s9hrMHGJJdYzkeAkrFoQgnF4GXf" />

DKO said the design had been shaped by the site's landscape setting and surrounding open space.

"Our vision for the site embraces its unique Bidjigal identity by blending the residential living with generous landscaping and a material palette inspired by the Bidjigal locality, and celebrating the panoramic views to Botany Bay and the wetlands reserves."

"Taking cues from Country, we seek to harmonise built form with the landscape and lightly touch the earth. By reconnecting, retaining and regenerating existing ecology, and weaving in natural elements, we can deepen our connection to Country."

The landscape strategy extends across the podium and rooftops, incorporating communal gardens, children's play areas, lawns, community gardens, family gathering spaces and extensive tree planting. New landscaped links will also strengthen the connection between the precinct and Jack Mundey Reserve, while publicly accessible open spaces have been integrated throughout the development.

The proposal builds on Conquest's broader placemaking strategy for the site. Through an ongoing partnership, local artist Joe Rashbrook has been appointed Urban Art Curator, working alongside young residents to transform the project's site hoardings into a public art gallery that allows the community to engage with the redevelopment before construction is complete.

Conquest has rapidly expanded its development pipeline since acquiring the Eastlakes site, with more than $6 billion worth of mixed-use projects now in planning across Sydney, including Stanmore, Castlecrag and Waterloo.

Conquest CEO Michael Akkawi said the redevelopment was about far more than replacing a shopping centre.

First look: ‘Far more than replacing a shopping centre’ as Conquest unveils 736-home Eastlakes redevelopment

Abadeen has lodged a State Significant Development Application (SSDA) for one of Mosman's largest apartment developments in recent years, seeking approval to transform the former Honeysuckle Garden and Midas site on Military Road into a 100-apartment mixed-use development.

The SSDA, lodged with investment partner Phoenix Property Investors, proposes around $230 million worth of new housing on the prominent <a href="https://www.apartments.com.au/new-apartments/494-516-military-road-mosman-nsw-2088">494-516 Military Road</a> site.

The proposal comes as Mosman Council continues to progress its recently endorsed Masterplan, which identifies the precinct for increased housing density while maintaining the suburb's established character.

Designed by DKO Architecture, the development would comprise 100 apartments above ground-floor retail, with a rooftop wellness precinct including a gym, sauna, entertaining areas and landscaped communal spaces.

Rather than pushing to the full 12-storey height identified in Council's Masterplan, the proposal ranges between five and nine storeys, stepping down towards Hale Road. A tenth level would accommodate resident amenities rather than additional apartments.

The project has been designed to appeal to a broad range of buyers, from first home buyers and young professionals through to families and local downsizers looking to remain on the Lower North Shore.

<img alt="Mosman" data-entity-type="file" data-entity-uuid="5dada03f-5b4c-43ba-ba62-2868add31440" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-27%20at%209.57.55%E2%80%AFAM.png?VersionId=7LBy0B.Jo8_iWAFJsClcV7Q3UnXrv49r" />

Abadeen Executive Chairman Justin Brown said the apartments had been designed as genuine long-term homes rather than investor-focused stock.

"The apartments have been designed as genuine long-term homes, with efficient floorplans that maximise usable living areas, generous storage, natural light and strong connections between indoor and outdoor spaces," Brown says."

"We've focused on creating homes for a broad range of buyers, from first home buyers and growing families through to downsizers who want to remain in Mosman."

The rooftop wellness offering forms a key part of the proposal, with residents set to have access to a gym, sauna, outdoor entertaining spaces, communal dining areas, landscaped gardens and a multi-use recreation court overlooking Sydney Harbour.

<img alt="Mosman" data-entity-type="file" data-entity-uuid="d37c2d6b-583a-4a0f-b7a9-9f46b893d2f4" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-27%20at%209.58.06%E2%80%AFAM.png?VersionId=FPoa5FCm2RtzjhAh2w5FTWJbV6GHfY8D" />

DKO drew heavily on the site's natural and cultural history, undertaking a Connecting with Country process with local Aboriginal Elders to inform the architectural and landscape design.

Senior Associate Matthew Ritchard said the design sought to create a building that responded to both the site's landscape and its cultural significance.

"The architectural language of the project is a deep expression of Connecting with Country, where the materiality and colour palette serve as a bridge between the site's geological history and its future as a residential sanctuary."

The proposal also retains the site's established blue gum tree as the centrepiece of the communal landscaped gardens, while introducing activated retail fronting Military Road to strengthen the connection between Mosman and Cremorne villages.

If approved, the project would deliver 100 new homes within walking distance of shops, public transport, schools and local amenities, adding to the limited pipeline of new apartments on the Lower North Shore.

<h2>Project Snapshot</h2>

Project: Honeysuckle Garden Redevelopment

Address: 494-516 Military Road, Mosman

Developer: Abadeen and Phoenix Property Investors

Architect: DKO Architecture

Lead Architect: Matthew Ritchard

Value: $230 million

Residences: 100 apartments

Key features:

<ul>
	<li>
	Ground-floor retail
	</li>
	<li>
	Rooftop wellness precinct
	</li>
	<li>
	Gym and sauna
	</li>
	<li>
	Outdoor entertaining and BBQ areas
	</li>
	<li>
	Landscaped communal gardens
	</li>
	<li>
	Multi-use recreation court
	</li>
	<li>
	Retained mature blue gum tree
	</li>
	<li>
	Connecting with Country design process
	</li>
	<li>
	Harbour, CBD and Balmoral views from upper-level apartments
	</li>
</ul>

Abadeen Executive Chairman Justin Brown said the apartments had been designed as genuine long-term homes rather than investor-focused stock

First look: Abadeen plans 100 apartments on former Honeysuckle Garden site in Mosman

The wave of apartment proposals sweeping through Mosman shows no signs of slowing, with another major residential development lodged through the NSW Government's State Significant Development pathway.

Developer First Quadrant Properties, which recently completed Willoughby Grounds and has several projects in planning across the North Shore, has unveiled plans for <a href="https://www.apartments.com.au/new-apartments/cove-on-ourimbah-40-56-ourimbah-road-mosman-nsw-2088">Cove on Ourimbah</a>, a 63-apartment development on Ourimbah Road, adding to the growing pipeline of projects reshaping one of Sydney's most tightly held harbour suburbs.

The proposal would consolidate nine properties at 40-56 Ourimbah Road into a part eight, part nine-storey apartment building, continuing the momentum created by the NSW Government's accelerated planning pathways that have seen several significant developments emerge across Mosman over the past 12 months.

Designed by Doroch Architects, the project would deliver 63 apartments, resident wellness facilities including a gym, pool and sauna, landscaped communal spaces and basement parking, while using recessed upper levels, generous setbacks and extensive planting to reduce the perceived scale of the building.

<img alt="First look: First Quadrant Properties eyes nine-storey Mosman apartment project under State Significant pathway" data-entity-type="file" data-entity-uuid="32ee68e4-141e-4a10-8f83-48e961a5e71e" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Ourimbah%20Road%2C%20Mosman%20a.png?VersionId=CUeILFc6APlwXPc.iplElbxHvREKwjig" />

Doroch Architects said the building had been designed to reinforce Mosman's established character.

"The building's aesthetic is grounded in the existing residential character of Ourimbah Road and the broader Mosman context," the architect noted in the planning documents submitted to the NSW Government.

The design adopts a contemporary material palette of natural stone, textured concrete and brown concave metal cladding, complemented by integrated planters and deep balconies. The podium incorporates softened curved concrete forms, while increased setbacks have been provided adjacent to the heritage-listed property at 60 Ourimbah Road to create a more sympathetic transition.

The site sits around 330 metres from Mosman Town Centre, placing it within the NSW Government's Low and Mid-Rise Housing policy area, where increased residential density is being encouraged close to shops, transport and services.

The proposal follows a string of major apartment projects lodged or declared State Significant in Mosman in recent months, including Abadeen's 100-apartment Honeysuckle Garden redevelopment on Military Road and several other developments across Awaba Street, Redan Street and Muston Street from the likes of Time &amp; Place, HELM and Prosker Property.

&nbsp;

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/time-place-to-take-on-mosman-apartment-market">Time &amp; Place to take on Mosman apartment market</a>

Read more:&nbsp;<a href="https://www.apartments.com.au/news/qld/first-look-abadeen-plans-100-apartments-on-former-honeysuckle-garden-site-in-mosman">First look: Abadeen plans 100 apartments on former Honeysuckle Garden site in Mosman</a>

&nbsp;

First look: Another major apartment proposal signals Mosman's development boom

A new State Significant Development Application (SSDA) could reshape a prominent vacant site in Gosford's CBD, with Ming Tian Real Property proposing a mixed-use precinct that combines affordable housing, retail activation and a new public plaza.

The proposal for 43-45 Beane Street and 2 Keevers Lane would deliver a <a href="https://www.apartments.com.au/new-apartments/43-45-beane-street-gosford-nsw-2250">two-building development</a> comprising a 26-storey residential tower and a five-storey affordable housing building above ground-floor commercial space. A key focus of the project is the delivery of dedicated affordable housing alongside new public domain improvements designed to transform Keevers Lane into a more active urban destination.

Designed by <a href="https://www.apartments.com.au/architects/tony-owen-partners">Tony Owen Partners</a>, the development would provide 130 apartments, including 20 affordable housing dwellings managed by a registered community housing provider for at least 15 years. The market housing component comprises 110 apartments across a mix of one, two and three-bedroom residences, while the affordable housing includes six one-bedroom, 13 two-bedroom and one three-bedroom apartment. The proposal also incorporates 416 sqm of ground-floor retail, three basement levels accommodating 140 car spaces, 42 bicycle spaces, communal open space and extensive landscaping.

<img alt="First look: Ming Tian Real Property plans landmark affordable housing tower for Gosford city centre" data-entity-type="file" data-entity-uuid="9b858791-9060-4ee7-9178-44cb9e640a85" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Beane%20Street%20b_0.png?VersionId=_jbY0mqPEs7.jBZxozR7d6T4u85FoPmb" />

The affordable housing component has been distributed across both buildings, with four apartments located within the main tower and a dedicated five-storey building delivering a further 16 affordable homes. The project also includes 12 adaptable apartments and 24 dwellings designed to Silver Level Liveable Housing Guidelines.

The architectural design draws inspiration from Indigenous storytelling.

"The design is based on the indigenous motif of the Rainbow Serpent," Tony Owen Partners said in the Design Verification Statement.

"The Rainbow Serpent is a traditional totem of coastal eastern Australia. It represents natural forces, creation, change, and rebirth and is often associated with bodies of water. This motif can be seen in the undulation of the balconies rising on the building," Tony Owen Partners said in the Design Verification Statement.

Beyond the residential offering, the proposal seeks to revitalise the surrounding public realm, particularly Keevers Lane.

"The ground floor streetscape includes a commercial and dining precinct which will significantly improve the amenity of the area. This strategy transforms a currently inhospitable laneway into a thriving centre of urban renewal and day and night time activation to compliment the new adjoining UNC facilities," the architects said.

<img alt="First look: Ming Tian Real Property plans landmark affordable housing tower for Gosford city centre" data-entity-type="file" data-entity-uuid="36b0ca6b-af15-424c-81db-9f3049c07b0c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Beane%20Street%20podium.png?VersionId=QCAv7bCitrg3zIGZUHI2z_HR8qVfKbp1" />

The Environmental Impact Statement notes that the project aims to "improve the provision of diverse housing options within Gosford City Centre, enhancing the mixed-use precinct by delivering high quality residential development, whilst concurrently providing a diverse range of housing choices through the provision of affordable housing, which is in growing need within the Gosford City Centre."

The site occupies approximately 2,070 sqm in the Gosford city centre, around 250 metres from Gosford Railway Station and within walking distance of Gosford Hospital, Mann Street's retail precinct and the University of Newcastle's Gosford campus currently under construction. The currently vacant site previously received approval for a lower-scale residential development, with the new proposal leveraging the NSW Government's in-fill affordable housing pathway to increase density while introducing dedicated affordable housing.

First look: Rainbow Serpent inspires bold new Gosford apartment tower

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

<html><body>
<div class="page" title="Page 3">
<div class="section">
<div class="layoutArea">
<div class="column">
The Year of the Monkey offers great opportunities for Chinese investors who are looking to buy property in Australia. 
The benefits to investing in Australia’s housing market include the country’s healthy and comfortable lifestyle, the property market’s relative stability, and regulations that protect investors’ ownership rights. 
Australian rental properties often deliver yields in the range of 3 percent to 5 percent, plus the potential for strong capital gains over the long term. 
Housing values in Australia’s major capitals have been rising over the past few years, driven by low interest rates and high investor demand. 
</div>
</div>
</div>
</div>
Simply <a href="https://www.propertyobserver.com.au/images/2016/chinese_ebook/english_guide.pdf" target="_blank">click here</a> to get your copy of Property Observer's eBook, Buying property in Australia: A guide for Chinese investors.
{rsform 54}
</body></html>

po-LsXgBTHBmX

Buying property in Australia: A guide for Chinese investors

<html><body><div>
Share markets in Australia have had a horror start to 2016 following weak performance in 2015.
Market losses are leading some investors to query whether to look elsewhere for investment.
Amid market volatility, some Australians will be eyeing residential property as a safer haven for their investments, not withstanding the likelihood of reform to the longstanding negative gearing system.
The prospects for Australian property over the coming year also mixed.
So what should you consider when reviewing your asset portfolio?
To download our handy guide from DPN to help aid your decision, <a href="/images/2016/DPN_ebook/DPN.pdf" target="_blank">click here</a>.
</div></body></html>

Property v Shares

<html><body>
Investing during times of market stress and volatility can be difficult. For this reason it’s useful for SMSF investors to keep a key set of things – call them rules – in mind.
The seven key rules, in my view, are: be aware that there is always a cycle; invest for the long term; turn down the noise; buy low and sell high; beware of the crowd; diversify and focus on investments offering a sustainable cash flow.
1. Be aware that there is always a cycle
The historical experience of investment markets – be they bonds, shares, property or infrastructure – constantly reminds us they go through cyclical phases of good times and bad. Some are short term, such as occasional corrections. Some are medium term, such as those that relate to the three to five year business cycle. Some are longer, such as the secular swings seen over 10 to 20 year periods in shares. But all eventually contain the seeds of their own reversal. The trouble with cycles is that they can throw investors out of a well thought out investment strategy that aims to take advantage of long term returns and can cause problems for investors when they are in or close to retirement. In saying this, cycles can also create opportunities.
2. Invest for the long term
The best way for most investors to avoid losing at investments is to invest for the long term. Get a long term plan that suits your level of wealth, age and tolerance of volatility and stick to it. This may involve a high exposure to shares and property when you are young or have plenty of funds to invest when you are in retirement and still have your day to day needs covered. Alternatively if you can’t afford to take a long term approach or can’t tolerate short term volatility then it is worth considering investing in funds that use strategies like dynamic asset allocation to target a particular goal – be that in relation to a return level or cash flow. Such approaches are also worth considering if you want to try and take advantage of the opportunities that volatility in investment markets through up.
3. Turn down the noise and focus on the right asset mix
The combination of too much information has turned investing into a daily soap opera – as we go from worrying about one thing after another. Once you have worked out a strategy that is right for you, it’s important to turn down the noise on the information flow surrounding investment markets. This also involves keeping your investment strategy relatively simple – lots of time can be wasted on fretting over individual shares or managed funds – which is just a distraction from making sure you have the right asset mix as it’s your asset allocation that will mainly drive the return you will get.
4. Buy low, sell high
One reality of investing is that the price you pay for an investment or asset matters a lot in terms of the return you will get. It stands to reason that the cheaper you buy an asset the higher its prospective return will be and vice versa, all other things being equal. If you do have to trade or move your investments around then remember to buy when markets are down and sell when they are up.
5. Beware the crowd and a herd mentality
The issue with crowds is that eventually everyone who wants to buy will do so and then the only way is down (and vice versa during periods of panic). As Warren Buffet once said the key is to "be fearful when others are greedy and greedy when others are fearful".
6. Diversify
This is a no brainer. Don’t put all your eggs in one basket as the old saying goes. Unfortunately, plenty do. Through last decade many questioned the value of holding global shares in their investment portfolios as Australian shares were doing so well. Interestingly, for the last five or so years global shares have been far better performers and have proven their worth.
It appears that common approaches in SMSF funds are to have one or two high-yielding and popular shares and a term deposit. This could potentially leave an investor very exposed to either a very low return oif something goes wrong in the high -yield share that they’re invested in. By the same token, don’t over diversify with multiple – say greater than 30 – shares and/or managed funds as this may just add complexity without any real benefit.
7. Focus on investments offering sustainable cash flow
This is very important. There’s been lots of investments over the decades that have been sold on false promises of high returns or low risk (for example, many technological stocks in the 1990s, resources stocks periodically and the sub-prime asset-back securities of last decade). If it looks dodgy, hard to understand or has to be based on obscure valuation measures to stack up, then it’s best to stay away. There is no such thing as a free lunch in investing – if an investment looks too good to be true in terms of the return and risk on offer, then it probably is. By contrast, assets that generate sustainable cash flows (profits, rents, interest payments) and don't rely on excessive gearing or financial engineering are more likely to deliver.
Final thoughts
Investing is not easy and given the psychological traps that we are all susceptible to – in particular the tendency to over-react to the current state of investment markets – a good approach is to simply seek the advice of a coach such as a financial adviser.
 
<a href="https://www.ampcapital.com.au/smsf-suite/product-suite">Dr Shane Oliver</a>, head of investment strategy and economics and chief economist at AMP Capital is responsible for AMP Capital's diversified investment funds. He also provides economic forecasts and analysis of key variables and issues affecting, or likely to affect, all asset markets.
</body></html>

jchancellor-FAypfDUnLy

Property 101: Seven rules for SMSF investors

<html><body>
Property investments by SMSFs through limited recourse borrowing arrangements (LRBAs) could come under increased scrutiny of the tax office this year, says major accounting firm H&amp;R Block.
Last year, the ATO had expressed concern at LRBA loans that were not structured correctly, including incorrect registration of the ownership of property bought under an LRBA. It spoke of increasing its focus on the LRBA route.
Given the growth in the SMSF sector and the increasing popularity of strategies such as LRBAs, H&amp;R Block has tipped that property will remain a top priority for the ATO’s compliance work in the SMSF sector this year.
“I know the ATO always keeps a close eye on property investment and especially LRBAs,” H&amp;R Block's director of tax communications, Mark Chapman told SMSF Adviser.
This particularly applies to related party borrowings which may currently be structured on non-commercial terms, with a June 30 deadline to have these structures rectified, it said.
According to the ATO website, an asset purchased by an SMSF trustee through LRBA is held in a separate trust.
If the loan defaults, the lender's rights are limited to the asset held in the separate trust, but not to assets held in the SMSF.
In 2015, an ATO campaign saw 500 postcodes issued with warnings urging holiday home owners to ensure deductions were not made during periods a property was not available for let.
“With property rental a valuable source of extra income for millions of taxpayers, it can be expected that the ATO will follow up with some targeted reviews and audits this year,” Chapman was quoted as saying.
The “sharing economy” – “driven in part by the high levels of non-compliance amongst those driving for Uber or renting rooms through Airbnb,” would also be an area of scrutiny by the ATO, he said. 
</body></html>

prateek24-ezbwHMbNAk

ATO to focus on LRBA route to property investment by SMSFs

<html><body>
GUEST OBSERVER
Through ATO ID 2015/27 and ATO ID 2015/28 the ATO seem to have cemented their position in relation to the application of s 295-550 of the Income Tax Assessment Act 1997 (Cth) to related party limited recourse borrowing arrangements (‘LRBAs’). 
Importantly, the ATO has since <a href="https://www.ato.gov.au/Super/Self-managed-super-funds/In-detail/News/Non-arm-s-length-limited-recourse-borrowing-arrangements" target="_blank" style="line-height: 1.3em;">confirmed</a> that their approach to this issue in future private rulings and litigation will be consistent with their view in ATO ID 2015/27 and ATO ID 2015/28.
In December 2014, DBA Lawyers director Daniel Butler noted that: 
SMSFs that are not benchmarked should consider doing so before any ATO audit activity occurs. Hopefully, the ATO may provide an amnesty to encourage SMSFs to benchmark to arm’s length. The big question here is whether the ATO will require retrospective adjustment.
Well it appears that the hoped-for amnesty has arrived. At a meeting of the Superannuation Industry Relationship Network on 10 November 2015 the ATO confirmed that SMSF trustees should review their LRBAs to determine whether they were established and maintained on terms that are consistent with an arm’s length dealing. While not certain, it also appears that the ATO <a href="https://www.ato.gov.au/Super/Self-managed-super-funds/In-detail/News/Non-arm-s-length-limited-recourse-borrowing-arrangements/" target="_blank">will not require retrospective adjustment</a>, stating that
We will not be selecting an SMSF for review for the 2014-15 year or earlier years purely because the fund has entered into an LRBA.
The ATO is to be commended for this pragmatic and fair approach. Allowing SMSF trustees to review and amend their loan terms seems fair and reasonable, particularly given various uncertainties that existed up until recently regarding related party LRBAs.
The amnesty is not open ended however, with SMSF trustees being encouraged to take the actions suggested before 30 June 2016. From that time:
The Commissioner may allocate compliance resources to review an LRBA of an SMSF for the 2015-16 year or later years.
Further, while the ATO is not dedicating compliance resources to review an LRBA of an SMSF until 1 July 2016, if the ATO come across an SMSF with a non-commercial LRBA via their usual activity in the meantime, the income of the SMSF might be taxed at the non-arm’s length income tax rate of 47% in accordance with s 295-550 of the Income Tax Assessment Act 1997 (Cth). It is clear then that it is in the best interests of SMSF trustees to get their house in order sooner rather than later. 
So what does this mean for SMSF trustees with an LRBA related party loan?
We understand that with a diminishing number of banks willing to lend to SMSFs, related party loans may seem like an appealing option. However SMSF trustees need to be careful to ensure that related party loans are strictly on an arm’s length basis to prevent SMSF income being NALI.
For those looking to enter into a new LRBA with a related party lender, proper benchmarking is crucial. In practical terms this means approaching a number of bank/unrelated lenders and obtaining quotes for the kind of loan terms they would offer to the SMSF in their particular circumstances, and then ensuring that the related party loan mirrors the terms offered by the unrelated lenders. For those who have already entered into an LRBA with a related party lender, now is the time to closely review your LRBA to ensure that it will stand up to ATO scrutiny. 
Favourable loan terms which may suggest that a related party loan is not on an arm’s length basis include:
·         <a href="https://www.ato.gov.au/law/view/view.htm?docid=%22AID%2FAID201528%2F00001%22" target="_blank">loans with 0%</a> or low non-commercial interest;
·         <a href="https://www.ato.gov.au/law/view/view.htm?docid=%22AID%2FAID201528%2F00001%22" target="_blank">high loan to value ratios</a>; and
·         <a href="https://www.ato.gov.au/law/view/view.htm?docid=%22AID%2FAID201527%2F00001%22" target="_blank">single lump sum repayment</a> at the end of the loan term rather than regular periodic repayments.
Further Training and Assistance
Advisers can brush up on the key considerations by signing up for <a href="https://www.dbanetwork.com.au/dbalawyers/seminars3/2712/3722/SMSF-Core-Course" target="_blank">Unit 10: LRBAs in the DBA Lawyers Core Course</a>. DBA Lawyers also offers a <a href="https://www.dbalawyers.com.au/smsf-borrowing-alter-terms/" target="_blank">service of altering the terms of an existing LRBA borrowing</a> and also <a href="https://www.dbalawyers.com.au/smsf-borrowing-loan-refinance/" target="_blank">prepares documents to refinance an existing LRBA borrowing</a>.
Those who are concerned that the favourable terms of their related party loan may give rise to NALI should seriously consider changing the terms of their loan to ensure that the parties are in the same position they would have been in had they dealt at arm’s length. While the ATO are yet to define a ‘safe harbour’ it is certainly prudent to mitigate the risks by having well-documented ‘benchmark’ evidence to indicate arm’s length terms and conditions.
Philippa Briglia is lawyer and Bryce Figot is director, DBA Lawyers and can be contacted <a href="https://www.dbalawyers.com.au" target="_blank">here</a>.
</body></html>

ATO to act soon on related party LRBAs

<html><body>
GUEST OBSERVER
The last 12 months have been a roller coaster ride for SMSF limited recourse borrowing arrangements. I thought I’d take the opportunity to re-cap what’s happened.
FSI
The biggest change — or more accurately the biggest non-change — is the government’s decision not to action the recommendation coming out of the Financial System Inquiry.
The final FSI report — released in December 2014 — had recommended that the government:
[r]emove the exception to the general prohibition on direct borrowing for limited recourse borrowing arrangements by superannuation funds.
More specifically, it stated:
Government should restore the general prohibition on direct borrowing by superannuation funds by removing Section 67A of the Superannuation Industry (Supervision) Act 1993 (SIS Act) on a prospective basis.
It described the problem as follows:
… growth in superannuation funds’ direct borrowing would, over time, increase risk in the financial system … the Inquiry notes an emerging trend of superannuation funds using LRBAs to purchase assets. Over the past five years, the amount of funds borrowed using LRBAs increased almost 18 times, from $497 million in June 2009 to $8.7 billion in June 2014.
Naturally, this was a cause for concern for many in the SMSF industry. Also, some felt that the recommendation unfairly targeted all LRBAs where only some or a minority posed any concern. Of course there are risks with any borrowing, but I have seen many SMSF trustees carefully plan and meticulously implement LRBAs which greatly added to an SMSF’s ability to provide retirement benefits. Such carefully thought out investments added only a commensurate amount of increased risk for the increased amount of return.
The recommendation was a particular concern for those SMSF trustees who had signed contracts to buy properties off-the-plan. With such purchases typically one must wait well over a year before the apartment is built and a bank is ready to execute loan documentation. If the government changed the law in the meanwhile, such SMSFs could have been left in a tricky position.
Luckily, the government has adopted a ‘wait and see’ approach. More specifically, on 20 October the government responded to the FSI as follows:
The Government does not agree with the Inquiry’s recommendation to prohibit limited recourse borrowing arrangements by superannuation funds.
While the Government notes that there are anecdotal concerns about limited recourse borrowing arrangements, at this time the Government does not consider the data sufficient to justify significant policy intervention.
Accordingly, LRBAs are still allowable … at least for the time being!
Bank policies
The last 12 months have seen a marked increase in difficulties in getting a bank to agree to lend to SMSFs. Some banks appear to flat out refuse to enter into new LRBAs for the acquisition of residential real estate. As at the date of writing, it is too soon to say with certainty, but due to the government not banning LRBAs (as set out above) it is hoped that the major banks will re-enter the residential LRBA market.
New tax legislation
The passing of the Tax and Superannuation Laws Amendment (2015 Measures No. 2) Act 2015 (Cth) was a positive change. It clarifies that a look through approach can be applied to the bare/holding trust that is a mandatory feature of LRBAs.
This new law inserted into the Income Tax Assessment Act 1997 (Cth) the concepts of an ‘instalment trust’ and an ‘instalment trust asset’. These include respectively an LRBA bare/holding trust and the asset that is owned via the bare/holding trust.
The legislation goes on to provide that where an investor (eg, an SMSF) has a beneficial interest in an instalment trust asset under an instalment trust, the asset is treated as being the investor’s asset instead of being an asset of the trust.
It gives the following examples:
<ul>
<li>A dividend in respect of the asset is paid to the instalment trust (ie, the bare/holding trustee). Under the new law the dividend is treated as if it had been paid directly to the investor.</li>
<li>A trustee of an instalment trust (ie, the bare/holding trustee) disposes of the instalment trust asset. Under the new law any capital gain or loss is made by the investor, not by the trustee.</li>
</ul>
Also, although the changes were inserted into the income tax legislation, they also extend to GST. For example, the recently inserted s 235 820(5) of the Income Tax Assessment Act 1997 (Cth) contains the following example:
If the trustee [of the instalment trust] has a net input tax credit under the GST Act, the [SMSF] must apply the credit to reduce the investor’s cost base for the instalment trust asset (even if the [SMSF] is not registered or required to be registered for GST purposes).
In truth though, many were not too excited by the passing of the Tax and Superannuation Laws Amendment (2015 Measures No. 2) Act 2015 (Cth) as it simply confirmed what has already been industry practice for many years.
Related party lending
Naturally, it is possible for the lender to an SMSF to be a related party.
In 2010, in Australian Taxation Office Interpretative Decision ATO ID 2010/162 the ATO stated that ‘there is no contravention of section 109 of the SISA if the terms [of a related party SMSF loan] are more favourable to the SMSF [than had the parties been at arm’s length].’
Then, the NTLG Superannuation Technical minutes of June 2012 record that the following two questions were put to the ATO:
If a related party lender offers a discounted rate of interest to an SMSF under a section 67A borrowing arrangement, would the discount be considered a contribution received by the SMSF?
Can an SMSF enter into a borrowing arrangement … with a related party if a zero rate of interest is charged by the related party lender and only principal repayments, with no imputed interest, are made throughout the loan term in accordance with the loan agreement?
The ATO answered both in terms favourable to taxpayers (ie, no to the first and yes to the second).
Further, in the general NTLG minutes of December 2012, the ATO stated:
The ATO position on low rate loan arrangements and LRBA is that that they do not generally invoke a contravention of the SISA, do not give rise to non-arm’s length income under section 295-550 of the Income Tax Assessment Act 1997 (ITAA), do not invoke Part IVA of the ITAA 1936 and are not considered to give rise to contributions to the SMSF just from that one fact alone.
Accordingly, many had read this as being a ‘carte blanche’ for low — or even nil — interest related party LRBAs. At DBA Lawyers we had never been a fan of such arrangements and of course ATO comments in NTLG minutes are not binding.
Then, in December 2014 the ATO released Australian Taxation Office Interpretative Decisions ATO ID 2014/39 and ATO ID 2014/40. These both considered related party LRBAs with nil interest being charged and both stated that the ATO’s view is that the arrangements did give rise to non-arm’s length income.
Accordingly, the position that DBA Lawyers has long been in favour of is now broadly well accepted by all, namely, that related party LRBAs should be on the same terms that would be agreed with an arm’s length lender.
Conclusion
The last year has shown that LRBAs are here to say (at least for the foreseeable future), but we must be just as careful as ever in their set up. This care includes ranging from ensuring that a bank will lend, up to ensuring that — where there is a related party — the terms of the loan are reflective of what is arm’s length.
This article is for general information only and should not be relied upon without first seeking advice from an appropriately qualified professional.
 
Bryce Figot is a lawyer at DBA Lawyers and <a href="https://www.dbalawyers.com.au/" target="_blank">can be contacted here</a>.
 
</body></html>

Recap on SMSF limited recourse borrowing arrangements

<html><body>
GUEST OBSERVER
All newly acquired investments by SMSF trustees in collectables and personal use assets since 1 July 2011 have been subject to strict rules under reg 13.18AA of the Superannuation Industry (Supervision) Regulations 1994 (Cth) (‘SISR’).
However, SMSF trustees should be aware that the grandfathering relief in relation to such investments that were held prior to 1 July 2011 will come to an end on 1 July 2016. Therefore, to avoid potential penalties, SMSF trustees with grandfathered investments in collectables and personal use assets will need to consider the current rules carefully and take appropriate action before 1 July 2016 to ensure their investments are compliant. 
This article provides an overview of the rules concerning collectables and personal use assets. 
The origin of the rules
The current rules in relation to collectables and personal use assets arose in response to the 2010 Super System Review (also known as the Cooper Review). The Cooper Review expressed concern that there was an unacceptable risk that investments by SMSF trustees in collectables and personal use assets may be made for present day benefits rather than for the purposes of retirement. Accordingly, the final report recommended a total prohibition on SMSF trustees making such investments. 
However, the federal government rejected the recommended blanket ban and instead sought to allay these concerns by legislating certain restrictions which are contained inreg 13.18AA of the SISR which commenced 1 July 2011. 
Collectables and personal use assets
Regulation 13.18AA covers artwork, jewellery, antiques, artefacts, coins, medallions or bank notes, postage stamps or first day covers, rare folios, manuscripts or books, memorabilia, wine or spirits, motor vehicles, recreational boats, and memberships of sporting or social clubs.
As matter of passing curiosity, we note that collectables and personal use assets include antique firearms but not modern firearms. Moreover, we note that it applies to spirits and wine, but not to beer or pre-mixed drinks. 
No leases to related parties
Sub-regulations (2) and (3) of reg 13.18AA require that SMSF trustees must not lease collectables and personal use assets to a related party of the SMSF, or enter into lease arrangements in respect of these assets with related parties. A lease arrangement is a broad concept covering any agreement, arrangement or understanding in the nature of a lease.
No use by related parties
SMSF trustees must not allow collectables and personal use assets to be used by a related party of the SMSF.
Storage in private residence of related parties
Sub-regulation (3) of reg 13.18AA prohibits SMSF trustees from storing collectables and personal use assets in the private residence of related parties.
The drafting of this provision raises the question of whether it may be possible to store collectables or personal use assets in the offices of related parties where those offices are not a private residence. For example, might an SMSF trustee be allowed to store artwork in the business premises of a related party? 
The ATO has published material on their website which clarifies the position:
You can store (but not display) collectables and personal use assets in premises owned by a related party provided it is not their private residence. They can't be displayed because this means they are being used by the related party. For example, if your SMSF invests in artwork it can't be hung in the business premises of a related party where it is visible to clients and employees.
Remember to keep a record of the reasons for deciding on where to store the assets.
Though this is not binding on the ATO, as the regulator of SMSFs, it is consistent with the legal construction of the regulations and the ATO seems relatively likely to follow the views expressed in such public materials.
SMSF trustees must also make and keep written records of the reasoning behind any storage decisions. There is no specific timeframe as to when the written records must be made, however, the record must be kept for at least 10 years after the decision.
Insurance
The rules stipulate that SMSF trustees must insure collectables and personal use assets in the name of the SMSF within seven days of acquiring such items, excluding memberships of sporting or social clubs.
More specifically, reg 13.18AA(5) provides:
Each trustee of a regulated superannuation fund that is a self managed superannuation fund commits an offence if:
(a)  the fund owns a section 62A item, other than a membership of a sporting or social club; and
(b)  it is more than 7 days since the fund acquired the item; and
(c)  the item is not insured in the name of the fund.
The reference to ‘owns’ is an interesting aspect of the drafting of sub-reg (5). It must be noted that most of the compliance requirements in reg 13.18AA are drafted using the language ‘holds an investment involving’ rather than ‘owns’ [emphasis added]. 
This difference in language raises the question of whether the requirement for taking out insurance in the fund's name would still apply in relation to investments in collectables and personal use assets which are held through an interposed entity. For example, could an SMSF trustee invest in artwork as a unitholder in a div 13.3A non-geared unit trust without the insurance requirement applying? If so, this would allow for more flexible insurance arrangements, such as having artwork insured as part of an overall gallery policy. 
Realisation of assets and related party transfers
Collectables and personal use assets must be realised for a market price determined by a qualified independent valuer if a related party receives an interest in the asset because of the realisation.
More specifically, reg 13.18AA(7) provides:
A trustee of a regulated superannuation fund that is a self managed superannuation fund commits an offence if: 
(a)  the trustee realises an investment held by the fund involving a section 62A item; and 
(b)  a related party of the fund receives an interest in the item because of the realisation; and 
(c)  the realisation was not at a market price determined by a qualified independent valuer. 
Though the ATO has long maintained that qualified independent valuers are desirable, it is notable that this is the first time that there has been an actual legislative requirement to utilise a qualified independent valuer.
Moreover, given the legislation is framed in terms of the SMSF trustee being the entity which ‘realises’ the collectable or a personal use asset, this raises the question of exactly what kind of dealings are covered.  
Neither ‘realises’ or ‘realisation’ are defined in the SISR. Therefore, in the absence of an express definition, we note that words should take their ordinary meaning. Relevantly, Macquarie Dictionary defines realise as follows:
4. to covert into cash or money: to realise securities.
5. to obtain as a profit or income for oneself by trade, labour or investment
6. to bring as proceeds, as from a sale: the goods realised $1000
7. to convert property or goods into cash or money.
Furthermore, the explanatory statement which introduced the provisions in reg 13.18AA uses the language ‘disposes of’. This would tend to suggest that disposal of the asset is required for the purposes of the regulations.
Though the above points are not entirely dispositive, it is arguable that a transfer of an asset directly to a member by way of in specie lump sum would not be caught by reg 13.18AA(7) and thus independent valuation would not be required. Naturally, however, this is a novel and untested construction and therefore the most prudent course of action may be to obtain a qualified independent valuation in any event. 
The end of grandfathering
As noted above, the rules in reg 13.18AA did not immediately apply to existing investments in collectables and personal use assets when the requirements commenced on 1 July 2011. This is because reg 13.18AA(9) provides that sub-regs (2)­–(7) do not apply to investments in collectables and personal use assets that were held by the fund on 30 June 2011. However, the rules will apply to such ‘older’ assets from 1 July 2016 because reg 13.18AA(9) ceases to be enforced as of 1 July 2016 (refer to reg 13.18AA(10)). 
Thus, SMSFs with grandfathered collectables and personal use assets must conform with reg 13.18AA by July 2016. For example, if artwork was stored at a member’s private residence, was not insured, or was leased to a member, the artwork must be leased to a third party at arm’s length terms and insured, or otherwise disposed of by 1 July 2016.
Penalties for contraventions
The prescribed penalty for contravention of any of the above rules is 10 penalty units (ie, $1,800 currently) for each SMSF trustee. This is another timely reminder of the advantages of using a corporate trustee over individual trustees. 
Where contraventions involve a collection of items, the potential for a penalty multiplier to apply to the facts should also be considered. Case law, such as Olesen v Eddy [2011] FCA 13 [32], Vivian v Fitzgeralds [2007] FCA 1602 [33] and Australian Prudential Regulation Authority v Derstepanian (2005) 60 ATR 518 [31] suggests that a multiplier approach is unlikely, however, no guarantee can be given about this and SMSF trustees should be very careful to ensure they comply with the rules.
Conclusion
SMSF trustees who have previously enjoyed grandfathered protection in relation to their investments in collectables and personal use assets held prior to 1 July 2011 will need to take appropriate action to ensure they meet the strict requirements of the SISR prior to 1 July 2016. 
This article is for general information only and should not be relied upon without first seeking advice from an appropriately qualified professional.
 
William Fettes and Bryce Figot are lawyers at DBA Lawyers and <a href="https://www.dbalawyers.com.au/" target="_blank">can be contacted here</a>.
</body></html>

Collectables and personal use assets in an SMSF: Bryce Figot

<html><body>
Tim Mackay, principal of financial advice firm Quantum Financial, says property investors struggling to pay higher demanded deposits on off the plan purchases through their SMSFs need to be careful they do not breach Australian Taxation Office rules.
Abrupt lending policy changes on required deposit has meant some buyers have lost out on valuable tax deductions given the top up deposit balance was a non-concessional (or after-tax) contribution. 
His other recommendations to Australian Financial Review readers included:
<ul>
<li>Consider if the investment is worth keeping. It might be worth cutting losses rather than losing generous tax concessions or being forced to liquidate scheme assets on unfavourable terms;</li>
<li>Reduce costs;</li>
<li>Sell other assets in the fund to reduce the debt;</li>
<li>Contribute more to your super – either through personal contributions or salary-sacrificing (making pre-tax contributions);</li>
<li>Seek a better deal on your loan;</li>
<li>Review existing advice and question how it allowed you to get into mortgage stress.</li>
</ul>
Last week it was suggested one in three off-the-plan Bankstown district investors are facing financial distress completing purchase of their properties because of tough new lending rules for higher deposits.
Chan &amp; Naylor partner Peter Ristevski's analysis suggested he had not had anyone's sale fall through yet with second mortgages being secured at higher interest rates.
Financial planner Sam Henderson, chief executive of Henderson Maxwell, says he thinks buying a property using SMSF was a great idea for a solid long-term strategy, but only for the right people and under the right conditions. 
"The idea of an off-the-plan development diminishes my excitement owing to potential onerous sunset clauses (whereby developers can change the terms and price), banks altering their lending criteria between exchange of contract and settlement, developers potentially going bust and the common issue of being surrounded by scores of similar properties in overdeveloped suburbs," he suggested to AFR readers.
"Consider, for example, that you buy a $700,000 property and put down your 10% deposit of $70,000.
"Let's assume the bank has agreed to fund your loan of 80% (thereby allowing you to use $140,000 of your fund as a deposit) and that you will fund the stamp duty via your next contribution of $30,000.
"Let's say the bank changes its view on SMSF loans and drops its LVR (loan to value ratio) so it will lend to 60 per cent, as many of the banks do for commercial properties.
"Well, you've just done your $70,000 deposit!"
</body></html>

Off the plan SMSF investors face challenges under higher deposit era

<html><body>
The Federal Court of Australia has made declarations and ordered Superannuation Warehouse Australia Pty Ltd (SWA) to pay a penalty of $25,000 for false and misleading “Free SMSF Setup” advertising.
The statements were made on two websites operated by SWA.
SWA, which provides online accounting and administration services for self-managed superannuation funds (SMSF), admitted that the statements were false and misleading. 
It consented to the declarations and additional orders requiring SWA to:
<ul>
<li>implement a compliance program;</li>
<li>post notices on the websites about the proceeding; and</li>
<li>notify consumers who applied to SWA for the free SMSF setup service about the proceeding.</li>
</ul>
The Federal Court found that between 22 January 2014 and 8 May 2015, the "Free SMSF Setup" statement on the websites was false, misleading and deceptive because it represented that SWA would set up an SMSF at no cost when in fact:
<ul>
<li>SWA’s online application form for the free SMSF set up service could not be submitted without authorising SWA to be the fund administrator for which there was a fixed monthly fee;</li>
<li>SWA requested applicants to put in place a payment plan for monthly payments of administration fees when it set up the SMSF; and</li>
<li>SWA charged monthly fees for its SMSF administration services.</li>
</ul>
These matters were not clearly or prominently disclosed on the websites.
In addition, between 22 January 2014 and 5 August 2014 applications for SMSF set up with a corporate trustee required a payment of $950 to be made to SWA, without this being clearly and as prominently stated on the websites where “Free SMSF Setup” was advertised.
In the judgment, His Honour Justice Beach found that the "Free SMSF Setup" representation was false or misleading in that:
"a)      the administrator consent was required for the “Free SMSF Setup”;
b)      the administrator consent affected the costs of the “Free SMSF Setup”; and
c)      monthly fees were required to be paid to SWA for its services.
In the circumstances the setup was not 'free'.”
ASIC Deputy Chair Peter Kell welcomed the decision saying establishing a self-managed superannuation fund is a significant financial decision. 
"Consumers should not be misled by advertising, including online.  
"ASIC considers that terms such as "free" convey a strong impression to consumers and should not be used where there is any charge or cost associated with the product or service advertised."
</body></html>

Free SMSF setup claims cop Federal Court fine

<html><body>
The federal government has rejected the Murray review's proposal to ban self-managed superannuation funds from borrowing to buy property.
The new Treasurer Scott Morrison said yesterday there was insufficient evidence to support an immediate ban on borrowing.
"The information collected on this doesn't lead us towards that conclusion at this point," he said. 
However, regulators would be asked to monitor the situation closely and report their findings to the government, he said. 
The decision to reject a borrowing ban, which was recommended by the Murray Inquiry amid concerns about the stability of the system if property prices crash, will be welcomed by super fund investors.
In August then Assistant Federal Treasurer Josh Frydenberg gave the strongest signal yet that the then Abbott Government would not implement a recommendation to ban do-it-yourself super funds from borrowing to invest in property.
"I want to emphasise that we have been considering this recommendation very carefully but flag that we want to make sure the approach we take is proportionate to the risks that have been identified," he said adding to put it in context "only 0.07%, perhaps 6,500 properties, were held in an SMSF through a limited recourse borrowing arrangement in 2013." 
</body></html>

Latest Guides

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

News

Editor's Picks

News

Developments

New apartments

New townhouses

News

Latest Guides

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

News

Editor's Picks

Receive the latest news stories to your inbox

News

Developments

New apartments

New townhouses

News