<a href="https://www.apartments.com.au/developers/sunland-group">Sunland Group</a> has officially lodged plans for its first Gold Coast apartment project since the departure of the Abedian family from the company three years ago, unveiling a new high-rise proposal for a prominent Broadbeach corner site on Old Burleigh Road.

The application was submitted by an entity directed by Tom Jamieson, stepson of longtime Sunland leader Soheil Abedian, and Riaz Rezvanipour, brother-in-law of Sahba Abedian, Soheil’s son.

Sunland acquired the 1,283 sqm site on the corner of Old Burleigh Road and Armrick Avenue for $9.5 million late last year and is now seeking approval for a <a href="https://www.apartments.com.au/new-apartments/99-101-old-burleigh-road-broadbeach-qld-4218">42-storey tower with 81 apartments</a>.

<img alt="First look: Sunland Group returns to Broadbeach with new Old Burleigh Road tower plans" data-entity-type="file" data-entity-uuid="fea2946d-90ee-4cfc-babe-2a8ad5db2cb6" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/pers.png?VersionId=BV0fihJw31nDIQ8ozY_h3GbS8mxDyhnm" />

Designed by <a href="https://www.apartments.com.au/architects/contreras-earl-architecture">Contreras Earl Architecture</a>, the proposed tower at 99-101 Old Burleigh Road would deliver a predominantly larger-format apartment mix aimed at the owner-occupier market. Plans include 17 two-bedroom apartments, 55 three-bedroom apartments, and nine four-bedroom residences across 35 residential levels.

The development also incorporates three basement levels, four podium parking levels, two levels of communal recreation facilities, and rooftop plant and equipment. A total of 189 car spaces are proposed, significantly exceeding the 90 spaces required under the planning scheme.

The architecture adopts a sculpted, curvilinear form, with deep wraparound balconies and integrated landscaping intended to soften the tower’s vertical expression. The planning report states the building’s “slender footprint/form provides a complimentary yet varied built form within the local streetscape” and contributes to “a varied, yet ordered skyline.”

Contreras Earl noted in its Architectural Statement that from the early stages, the project addressed a fundamental challenge: how to accommodate the required residential yield while avoiding the conventional model of a tower sitting on a rigid, fully resolved parking podium.

“The most direct response would have been to consolidate parking into a singular, flat podium and extrude a repetitive tower above,” the statement said. “While efficient, this approach would result in a consolidated built form with limited engagement with the surrounding landscape and public realm.”

Instead, the conventional podium model was “deliberately rejected”. The architects described the base of the building as “a landscaped architectural condition where structure, planting and circulation are integrated”.

“Rather than presenting a continuous built mass, the base of the building is articulated through a series of concrete planter elements that organise the podium into a fragmented system,” the statement said. “This approach reduces the perceived bulk of the lower levels while establishing a more permeable interface with the streetscape and adjacent open space.”

<img alt="Sunland" data-entity-type="file" data-entity-uuid="923fad8d-c960-4527-8fbe-975cf1ddf88d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-25%20at%2010.32.03%E2%80%AFAM.png?VersionId=pngwb0hYOIUpq9vDw6F2EsOiVuHF3DiX" />

&nbsp;

The site sits within the High Density Residential Zone and inside the City of Gold Coast’s unrestricted “HX” building height area, where the planning framework anticipates intensified residential development tied to the expanding light rail corridor. The planning report notes the area is undergoing “transition toward more intense development forms” given its proximity to Broadbeach, Surfers Paradise, and high-frequency public transport infrastructure.

Positioned directly opposite Broadbeach Park and within walking distance of Florida Gardens light rail station, the development would sit among a rapidly evolving stretch of Old Burleigh Road that has become one of the Gold Coast’s most active apartment development corridors.

The application joins a growing pipeline of luxury residential projects reshaping Broadbeach, including nearby developments by 5Point Projects, Polycell, and Graya.

The planning report argues the project contributes toward the Gold Coast’s long-term housing targets under the South East Queensland Regional Plan, which forecasts the need for more than 100,000 additional high-rise dwellings across the city by 2046.

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The Abedian family departed Sunland Group in late 2023, ending a four-decade association with the company, and subsequently established the private development firm Abedian &amp; Co. The group is currently delivering <a href="https://www.apartments.com.au/new-apartments/greenmount-residences-cnr-hill-street-and-marine-parade-coolangatta-qld-4225">Greenmount Residences</a> at Rainbow Bay and recently launched <a href="https://www.apartments.com.au/new-apartments/18-mary-avenue-14-18-mary-avenue-broadbeach-qld-4218">18 Mary Avenue</a> in Broadbeach.
</section>

Joel Robinson

First look: Sunland Group returns to Broadbeach new apartment market with new Old Burleigh Road tower plans

The Minns Labor Government has established the new Bays West Delivery Authority to lead the development&nbsp;of the Bays West Precinct and Blackwattle Bay Precinct.&nbsp;

The Authority is charged with creating Sydney’s newest precinct, a thriving, connected, sustainable hub with White Bay Power Station as its cultural heart. Its vision is to build on the area’s natural, cultural and industrial history to shape a vibrant new neighbourhood.

The precinct will deliver up to 8,500 well-located homes, including a minimum of 10 per cent affordable and essential worker homes. Combine new housing with public open space, opening public access to the waterfront for the first time in more than 100 years, while retaining important deep-water facilities to support Sydney’s working harbour.

Located just minutes from the Sydney CBD and connected to a world-class metro, ferry, walking and cycling links, the Bays West precinct will rebalance housing growth towards well-serviced inner-city locations and help tackle the state’s housing crisis.

The Bays West Delivery Authority,&nbsp;an agency of the Department of Planning, Housing and Infrastructure, will report to the NSW Minister for Lands and Property who already has oversight of major precinct renewal projects including at Blackwattle Bay and Barangaroo.

As part of the broader Bays West transformation, the Minns Government recently announced that a proposal from Lendlease to redevelop part of the Bays West Precinct has progressed to Stage 2 of the NSW Government’s unsolicited proposals process.

<img alt="Sydney" data-entity-type="file" data-entity-uuid="2ed71eb9-d8e8-4fa7-b9d1-de4531dcf2f3" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-25%20at%209.42.31%E2%80%AFAM.png?VersionId=IDryFIbped9SNDg72LEN_EecvhUsOPvp" />

The Minns Labor Government has also confirmed the Bays West precinct will have a new suburb name. This will be the first major suburb built in close proximity to Sydney’s CBD in decades and will encompass the area currently being referred to as Bays West, including Glebe Island and the White Bay Power Station. Served by a new Metro station just five minutes from the CBD, it will become one of the most populous suburbs in the Inner West and one of Sydney’s premier cultural destinations.

An early works program is taking shape, which&nbsp;includes the first stages of an international design competition.&nbsp;

The aim of the Bays West&nbsp;International&nbsp;Design Competition is to&nbsp;ensure design excellence is embedded in the project from the start. The competition will deliver an&nbsp;urban framework that defines the character, ambition and long-term identity of&nbsp;this&nbsp;former industrial precinct as it transitions to a vibrant, inclusive and sustainable residential&nbsp;neighbourhood.

The competition will be led by the Bays West Delivery Authority in partnership with Government Architect NSW.&nbsp;

It will launch with an invitation for a global Expressions of Interest, before moving to an invitation-only stage that will be assessed by a panel that&nbsp;will provide advice to Cabinet who will select a winner.

Premier of NSW, Chris Minns said the establishment of the new Authority is the first step in transforming the Bays West precinct into a vibrant, livable suburb minutes from the Sydney CBD and two stops from Hunter St Station on the Metro West line.

“The Authority will deliver well-located homes close to the heart of the city and integrate the new precinct with Blackwattle Bay and the new Sydney Fish Market.

“This is a generational opportunity to build a new suburb on the city’s edge and open the harbour foreshore to the public for the first time in a century.”&nbsp;

Minister for Lands and Property Steve Kamper said the new Bays West Delivery Authority established by the Minns Government will turbocharge the development of Sydney’s newest suburb.

“The Authority is working at a record pace to deliver an international design competition, planning pathways and a financial model so that this development benefits Sydney with well-designed homes in a central location, close to public transport, jobs, entertainment and essential services.

“If we want Sydney to stay liveable and affordable, we need to be bold about using underutilised government-owned land to deliver homes for the future while making sure essential working harbour functions can be accommodated.”

Bays West Delivery Authority established to "turbocharge" Sydney’s newest suburb

Around 400 additional homes could be built at Southwark Grounds on Port Road, lifting total site capacity from 1300 to around 1700 dwellings.

A recently approved code amendment would allow apartment towers of up to 14 storeys in some areas of Renewal SA’s redevelopment of the former West End Brewery.

Renewal SA Acting Chief Executive Shane Wingard said he welcomed the code amendment, with the increase in heights and homes making a positive impact on the supply of high-quality, well-connected housing close to the city.

“By going higher across some parts of Southwark Grounds, we are adding a substantial number of very well-located homes with little impact on project delivery time or planned open space,” Mr Wingard said.

Since the project officially launched in 2025, Mr Wingard said more than 12,000 enquiries had been received about living at Southwark Grounds.

“The very strong early interest we’ve seen since homes were first released in the precinct reinforces our plans to create more housing opportunities,” he said.

The Southwark Grounds code amendment was launched in December last year, with community engagement undertaken over five weeks from January.

It proposed increasing maximum building heights from eight to 14 storeys on the eastern section of Southwark Grounds, and to 12 storeys across the remainder of the site, with minimum building heights ranging from two to four storeys.

The code amendment was implemented through an Early Commencement policy in late January, allowing developers to quickly explore the viability of increased height and housing yield while other planning processes continue.

One of the first developers delivering apartment sites have already finalised redesigns to increase the number of apartments following the code amendment.

Samaras’ development adjacent to the future Colonel Light Park is now planning to deliver 125 apartments across 11 storeys, significantly greater than original plans of around 50 apartments across four storeys.

The developer is also exploring the potential for additional affordable housing outcomes.

Most of the apartments at Southwark Grounds will be delivered within a master-planned precinct on a large parcel of land on the eastern portion of the site, covering around two-thirds of its 8.4 hectares.

Wingard said detailed precinct planning over the coming months may identify further opportunities to increase yield further that could see total apartment numbers at Southwark Grounds, exceed this number.

Affordable homes at Southwark Grounds will also see a net increase, with Renewal SA maintaining its commitment to a minimum of 20 per cent affordable housing across the development.

&nbsp;

&nbsp;

Civil works have begun across the site, with construction under way on the first new roads surrounding a townhouse precinct in the south‑west corner of Southwark Grounds. This includes Renewal SA’s 17 Founder’s Row homes, which are on track for completion by Christmas.

“We expect to have people living at Southwark Grounds by the end of the year, so delivering roads and public spaces for those residents is among our highest priorities.”

Construction of 40 townhouses off Anderson Street, known as West Village and being delivered by Contour, is forecast to begin in mid‑2026. Kolabb’s Anderson Lane development will follow shortly after, delivering a further 26 townhouses.

Southwark Grounds is a state government‑led urban renewal project now set to deliver around 1,700 homes over the next decade.

Homes will be supported by a supermarket, a range of retail and hospitality offerings anchored by a revitalised Walkerville Brew Tower, a childcare centre, car parking and well‑connected public spaces.

400 new homes planned for Adelaide's former West End Brewery site

Brisbane developer&nbsp;<a href="https://www.apartments.com.au/developers/cavcorp">Cavcorp</a> has lodged plans for a new mixed-use residential development at <a href="https://www.apartments.com.au/new-apartments/55-wyandra-street-teneriffe-qld-4005">55 Wyandra Street</a>, Teneriffe, anchored by an 85-metre public laneway designed to reconnect the suburb’s riverfront with the Gasworks precinct.

The buildings, known as Teneriffe House and Teneriffe Lane, would replace the existing Queensland Cotton head office site with a 15-storey residential tower transitioning to eight storeys toward Helen Street. The project has been designed by Plazibat Architects and lodged as a code assessable development application for 93 apartments across a 3,401 sqm mixed-use site within the Newstead and Teneriffe Waterfront neighbourhood plan.

Central to the scheme is the transformation of an existing service easement into a publicly accessible cross-block connection linking Wyandra and Helen Streets. Cavcorp says the new laneway will act as both a pedestrian shortcut and a landscaped civic space between the Teneriffe Riverwalk, ferry terminal, and Gasworks precinct.

<img alt="First Look: Cavcorp unveils Teneriffe House and Teneriffe Lane plans for landmark wellness tower in Teneriffe" data-entity-type="file" data-entity-uuid="26e7f058-b065-4de8-b13d-a2b8cb64dfcc" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/bldg.png?VersionId=sELS0ZKYi361oYipUa1BIKfe_.DLZoFV" />

“The revised proposal delivers a legacy public-realm cross-block link, permanently secured for community use, transforming an existing private easement into a safe, high-quality pedestrian connection between the Teneriffe heritage riverwalk and the Gasworks–Long Island precinct,” the planning report states.

The laneway will sit beneath a large subtropical loggia integrated into the podium levels of the development. The design incorporates deep landscaping, water gardens, lobby spaces, business lounges, and ground-floor apartments to create what Cavcorp describes as a climate-responsive “urban verandah.”

The tower itself has been designed as a slender form with recessed floorplates and curved translucent corners inspired by contemporary Japanese architecture. The building height aligns with the Commercial Road precinct controls, which permit towers up to 15 storeys within proximity to Longland Street.

<img alt="First Look: Cavcorp unveils Teneriffe House and Teneriffe Lane plans for landmark wellness tower in Teneriffe" data-entity-type="file" data-entity-uuid="a8a17d40-43b6-4718-b3fd-67676fcbb485" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/pers%202_1.png?VersionId=i3VwDtp5AmL_8InW7w4qRbDFEpb744Jt" />

The project will comprise a mix of larger-format apartments aimed at owner-occupiers, downsizers, and families. The proposed apartment mix includes 11 loggia apartments across the lower levels, 50 four-bedroom Sky-Terrace apartments from levels three to seven, and 32 Sky-Pool Homes occupying the upper tower levels. The Sky-Pool Homes will feature private thermal plunge pools integrated into oversized balconies.

According to the application, the apartments are intended to reinterpret the scale and character of Teneriffe’s woolstore conversions and Queensland homes within a vertical residential format.

“The sky-pool homes build on Cavcorp’s previous projects and introduce a distinct apartment typology to Teneriffe, informed by both local and international precedent and responding to an identified market demand for enhanced safety, space and amenity,” the planning submission notes.

A major focus of the proposal is its five-level wellness and lifestyle offering, extending from the basement through to the rooftop.

Amenities proposed include a rooftop Swim &amp; Racquet Club with a 25-metre Olympic lap pool and tennis court, coworking spaces and libraries, golf simulators, wine storage, concierge facilities, business lounges, pet wash areas, and rooftop longevity-focused wellness spaces with spas, outdoor fitness zones, and landscaped terraces.

<img alt="First Look: Cavcorp unveils Teneriffe House and Teneriffe Lane plans for landmark wellness tower in Teneriffe" data-entity-type="file" data-entity-uuid="944b352c-49b9-4247-a4c6-5967b4b69fda" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/amenity.png?VersionId=Ed_qKjAtMwFT.5gfl3jiA9QwdWxSMsaX" />

All parking will be concealed within basement levels accessed from Wyandra and Helen Streets. Cavcorp says the deep-basement engineering approach allows the entire ground plane to prioritise landscaping, pedestrian movement, and active frontage rather than vehicle infrastructure.

The development continues Cavcorp’s concentration in Newstead and Teneriffe, where the Brisbane developer has delivered a number of apartment projects including Lucent, Le Bain, and Luminare, as well as the Long Island Wellness Precinct nearby. Several of those projects have received national design and architecture awards, including recognition under Brisbane’s “Buildings that Breathe” program.

Cavcorp unveils wellness-focused Teneriffe House and Teneriffe Lane apartment buildings

Focus Group Investments has lodged plans for a new apartment development at <a href="https://www.apartments.com.au/new-apartments/64-70-hanover-street-fitzroy-vic-3065">64–70 Hanover Street</a> in Fitzroy, seeking to utilise the Victorian Government’s recently introduced Great Design Fast Track pathway to accelerate approvals for the project.

The proposal is among the latest developments to emerge through the state-led initiative, which was established to fast-track well-designed residential projects in activity centres and transport-connected inner-city locations. The pathway allows qualifying developments that meet elevated design and housing benchmarks to bypass traditional council planning timeframes and instead be assessed directly by the Department of Transport and Planning.

Designed by SJB, the development will comprise a mix of apartments above activated lower levels, with a strong focus on architectural articulation, landscaping, and communal amenity. The design response seeks to balance the industrial character of Richmond’s former warehouse precincts with a more contemporary residential form.

<img alt="First look: Focus Group Investments taps Victoria’s Great Design Fast Track for Richmond apartments" data-entity-type="file" data-entity-uuid="abea51cc-d85b-479e-9aef-a589f3b37ca7" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/ground.png?VersionId=e1Kf8EyPWwyiVumtqQ4rM5S4GpOR3CCz" />

Proposed are 63 new dwellings, a wide ranging mix of studio, one-, two-, and three-bedroom apartments, and townhouses and duplexes. They will be spread across a part-three, part-eight storey building.

The Planning and Urban Context Report by Tract says the development is of an "exemplary architectural standard" and has been carefully crafted by SJB Architects.

"Dwellings&nbsp;will benefit from excellent access to natural light, cross-ventilation opportunities and extensive communal space," the report noted.

The architectural material highlights the project’s integration of landscaped elements and communal spaces throughout the building. The proposal also incorporates sustainability initiatives aligned with the Victorian Government’s push for higher-performing apartment developments under the fast-track program.

The Great Design Fast Track was unveiled by the Victorian Government in 2024 as part of a broader housing supply strategy aimed at accelerating the delivery of new homes. Projects assessed through the pathway must demonstrate high-quality architecture, sustainability outcomes, and housing diversity while being located close to public transport and existing infrastructure.

<img alt="First look: Focus Group Investments taps Victoria’s Great Design Fast Track for Richmond apartments" data-entity-type="file" data-entity-uuid="afdbe834-8dc4-4a77-a943-ba07bc927348" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/site_11.png?VersionId=0J657j.TaChAZfp93wqJYBTqSsnREJx2" />

Focus Group, founder and led by Paul De Lutiis, is increasingly active across Melbourne’s inner suburbs, targeting well-connected urban renewal locations suited to medium and higher-density residential development. The Fitzroy proposal continues that strategy, leveraging the area’s strong transport links, established retail amenity, and proximity to the CBD.

Fitzroy has been one of the most popular spots for developers and buyers in recent years. The likes of PACE Development Group, SMA Projects, Crema Group and Chapter Group, currently selling projects in the suburb.

First look: Focus Group Investments taps Victoria’s Great Design Fast Track for Fitzroy apartments

Smsfs

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Self-managed super fund trustees are being put off from seeking financial advice by the slew of <a href="https://www.smartcompany.com.au/finance/44332-public-register-for-dodgy-financial-planners-aims-to-clean-up-industry">recent scandals in the financial planning sector</a>, according to taxpayer advocate group Taxpayers Australia.
Reece Agland, superannuation products and services manager at Taxpayers Australia, said the organisation has considerable anecdotal evidence to suggest trustees are being spooked by recent events, such as the Commonwealth Bank scandal.
“Talking with our member and SMSF clients, they are saying they are scared to go to a financial planner now because of all bad news and they are concerned they’ll receive bad advice,” says Agland.
Susie Salmon, head of superannuation and SMSF financial services at Crowe Horwath, said while she has not seen any evidence of this herself, SMSF trustees are generally more cautious than others with their super.
“SMSF trustees are more wary than other superannuants. They want to make sure they know how their investments are going,” says Salmon.
She says trustees are also more concerned with their independence, and the recent scandals have shown some financial planning institutions have a lack of independence.
Agland says a lack of trust in financial advice may lead trustees to miss out on investment opportunities or products. He says trustees must seek as much knowledge as they can to ensure the health of their SMSF.
“Even if [trustees] are scared to go to a financial planner, they should educate themselves to make better decisions.”
Meanwhile, the fears follow good news for Australian super, as a global superannuation index this week announced Australia as the number two global superannuation system.
The Mercer World Pension Index places Aussie super just behind Denmark in an annual survey of 25 superannuation systems, due in large part to our superannuation guarantee.
Salmon agrees the super guarantee and forced contributions have landed the country such a high ranking.
“The number one reason why we are so big and will become much larger is because we are forced,” she says, pointing out Australia is the only county in the world to institute such involuntary contributions.
“I’d expect we’d be number one soon. We are seen as one of the leaders in superannuation. They [the rest of the world] always look towards the Australian market.”
She also says Australians feel more invested in their super than other countries because the money is “our own personal” money instead of the government’s.
Salmon says because of their strong interest in controlling their own investment, SMSF trustees are key contributors to the strength of the Australian superannuation system.
Graeme Colley, director of technical and professional standards at the SMSF Professionals' Association of Australia, said he agrees the SMSF sector is a major factor behind the ranking, given SMSFs are the fastest growing segment of Australian super and the funds, on average, hold about $1 million each.
“They are contributing, not only by the amount they’ve got in the funds, but from an investment point of view, they are certainly doing their part,” says Colley.
This article first appeared on <a href="https://www.SmartCompany.com.au" target="_blank">SmartCompany</a>.
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krobb-aCrRNnPq6D

Will financial scandals push SMSFs to go it alone?

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To this day, I have not seen any financial planner, accountant, or other financial specialists offer secondary stock to their SMSF client when their client is being referred to buy property.
What I have seen are many financial professionals moonlighting as real estate agents and offer new stock to their clients in droves.
My belief is that many are attracted by the extremely high commissions being offered, some as high as 6%-8% of the value of the property. A standard commission paid to an agency is on average 1.7% as reported earlier in the year.
Now if I read correctly, our own representatives from the REIA believe the lines are blurred on our side: “Our involvement with this inquiry was at the request of the committee, although the REIA has been pro-actively working to address community and industry concerns about the blurring lines between real estate agents and the provision of financial advice,”<a href="/guides/the-blurring-line-between-real-estate-agents-and-smsf-advice"> said the REIA</a>.
Property marketing companies may blur the line but they are not the majority of what I call the “real” real estate industry. I’m of the opinion that the lines are blurred on the side of financial planning (FP) and the finance sector and there should be tighter controls there, or at least be on-par with the onus placed on the real estate industry.
As real estate agents, we work under very close scrutiny by the authorities when it comes to offering any form of financial advice. In a nutshell, we can’t offer any financial advice. Even hints in our marketing of property by using such terms as 'great investment opportunity', 'great rental returns', 'awesome growth potential' and even 'investors dream' may get an agent into hot water.
However, many financial professionals moonlight as real estate agents. It appears that individuals in the financial sector and property marketing companies can state all of the above under their governance. They can also refer property without being holders of real estate licences. Ironic, unfair, unjust? however seemingly true. It’s a marketing fee, a referral fee that they get and not a commission. Semantics I know, yet a major loophole in the regulations that needs to be closed.
I have had many discussions with Tim McKibbin from the REINSW with respect to these issues over the years. I have been assured the REINSW is lobbying to have these issues resolved. Closing these loopholes couldn’t come soon enough. 
A lawyer friend of mine says: "If you don’t want to be fined and serve time, don’t have a licence and you have a better chance to keep under the legal radar." Wow, I guess these words echo very loudly in the halls of many financial institutions and property marketing companies pushing new property to SMSFs.
We also have the reversal, an agency<a href="https://www.smh.com.au/business/comment-and-analysis/shock-as-real-estate-franchise-enters-financial-planning-market-20140916-10hljo" target="_blank"> Ray White looking to move into the financial planning sector</a>. In my humble opinion, this move is a recipe for major disaster. However this is a path chosen by one group. If this is a means by the agency to get a piece of the action where very high commissions abound in the sale of new properties to SMSFs. If it is, all I can say is “watch this space” and good luck.
Some real estate agent will be tempted to flirt with massive fines and law suits as they step into a paddock where they believe the grass is greener. But I am one to believe most, if not all, that work in the space of “secondary stock” were “normal/standard” commission are paid will not be tempted to flirt with danger, nor have time to see if the grass is greener on the other side.   
Edwin Almeida is licensee in charge of <a href="https://www.just-thin.com.au" target="_blank">Just Think Real Estate</a>.<a href="https://www.just-thin.com.au/"> </a>
He is also the creator of <a href="https://www.youtube.com/user/JustThinkProperty" target="_blank">Oz Real Estate.TV</a> and a presenter for<a href="https://propertyinvestingvault.com/" target="_blank"> propertyinvestingvault.com</a>.
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ealmedia-arK4DBYLjS

When it comes to SMSFs, blurred lines favour financial planners not real estate agents

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SPONSORED POST
Every property investor wants to buy well, so they can eventually sell well. But identifying a property that will deliver strong yield and solid capital gains over the long term is not always easy. 
Rental growth has been stagnant in some areas, while capital gains on individual properties are never assured, even in cities where the overall trend has been for price growth. 
Finding a property that will produce a positive result requires in depth research and consideration whether investors are buying directly or through a self-managed superannuation fund.
Investors who buy property through an SMSF typically plan to hold for the long term. The fund should have an investment strategy that documents its goals for holding investment property. This should consider diversification and liquidity requirements. Properties are high value assets making it difficult for a fund to be diversified unless the balance is large. They are also illiquid, meaning they can’t quickly be sold for cash.  
There are restrictions on the types of improvements SMSFs can make to properties they own if they borrow the money, particularly if the fund has borrowed to buy the investment. This means capital growth and rental income, rather than profits from developing or renovating and on-selling a property, will drive investment returns for the fund. 
SMSFs can buy most types of residential new and established property as long as the property is not purchased from anyone related to the fund members. Commercial property can be bought from related parties as long as the transaction meets regulatory conditions such as being sold at market value. 
Where to Buy
Location, price point and the property’s attributes are some obvious features to consider when searching for residential investment property.  Looking at these from a home owners’ point of view gives little depth to the considerations of what will drive the profits.  
There are various schools of thought on the best locations for an investment property. Some commentators advocate buying apartments in inner city areas, while others favour properties in middle and outer ring suburbs, or in regional locations. Schools of thought promote property commentary or opinion and these are real estate skills. It is much better to look to advice that presents and analyses the facts to support informed decision-making.
It can be difficult to predict the capital gains prospects of an area but some factors that influence growth potential include demand as measured by population growth or days on the market, supply as measured by dwelling starts and infrastructure that attracts a regional focus or increases accessibility to regional amenities and employment.
Suburbs where the growth in demand is outstripping the supply of new properties are more likely to experience capital growth than areas where supply and demand are in balance, or where an oversupply is emerging.  
Rental growth and the yield the investment property delivers will be affected by factors such as the appeal of the area, its life style amenities and commute times to employment and educational centres. Rental vacancy rates that reflect the current appeal, can be trended to support in depth understanding.
Timing
Property markets tend to move in cycles where prices rise fairly strongly, then plateau or decline before picking up again.  
Buying into an area where prices have already achieved significant capital gains may not offer the same growth potential as nearby suburbs that have not boomed as strongly. 
Timing entry into any investment is complex and holding for the long term can minimise the risk of a capital loss.  Trended capital growth rates versus days on the market can give much stronger support for informed decision making.
Be wary of areas that are dependent on single industries for their economic success. Mining towns for instance, delivered incredible rates of capital growth during the boom but their prospects are very limited now that investment in the resources sector has slowed. 
What
When considering individual properties look at the demographics of the area and favour the properties that will appeal to the broadest range of tenants for rental and to home owners for your exit.   
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admin-TPy8csjoDs

Creating an SMSF portfolio of property: Forrester Cohen on entry strategy

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More SME owners will focus much more closely in coming months on the pros and cons of buying and gearing their businesses premises through their self-managed super funds.
Specialists in superannuation, investment and business advice <a href="https://www.smartcompany.com.au/finance/superannuation/43421-self-managed-super-smes-to-expedite-gearing-of-business-premises" target="_blank">expect SME owners to consider accelerating any existing plans</a> to gear their business premises through their self-managed super funds. This follows renewed debate about whether to bar future gearing.
The interim report of the Australian government’s inquiry into the financial system calls for views about whether superannuation gearing should be prospectively prohibited because it “may create vulnerabilities for the superannuation and financial systems”.
Here are 10 critical points to consider when deciding whether your SMSF should acquire business premises, typically through gearing, to rent to your family business:
Pros
<ol>
<li>
Family businesses may make excellent tenants Sue Prestney, a partner at PwC Private Clients, says that in her experience, family businesses tend to make “excellent” tenants for their SMSF-owned business premises. Again speaking in regard to her own clients, Prestney says their family businesses typically pay their rent on time to their SMSF. “They look after the premises like it was their own.” Martin Murden, a director of SMSF consulting and auditing with the Partners Wealth Group, says family businesses make “great” tenants provided the business is successful. And Murden says dealings between a family SMSF as landlord and a family business as tenant can be smoother – regarding such things as rent reviews – than with an arm’s-length tenant. 
</li>
<li>
Exception for business property Business real estate is one of the limited types of assets that SMSFs are allowed to acquire from related parties including members. And business real estate is one of the few types of assets that SMSFs can lease to related parties, including the members’ businesses, without a limit on its value under the in-house asset rules in superannuation law. 
</li>
<li>
Concessional tax treatment During an SMSF’s accumulation or saving phase, rents are taxed at 15% within the fund while capital gains are taxed at an effective 10% if the property is held for more than 12 months. And once the business premises are backing the payment of a superannuation pension, fund income and capital gains are tax-free. This means that the SMSF may eventually be able to sell a property in the pension phase without paying CGT on any profits. SMSFs in the accumulation phase can claim the same types of tax deductions as individual investors who buy properties in their own names including negative-gearing deductions for the shortfall between the deductible expenses, including interest payments, and rental income. 
</li>
<li>
Business succession and estate planning SMSF trustees aim to keep the premises of their family businesses in their super fund through generations, with the aim of gaining greater security of tenure for the business as well as business succession and estate-planning benefits. Under this strategy, an SMSF will need sufficient other assets to pay member superannuation benefits when necessary for older members such as a business’s founders. 
</li>
<li>
Asset protection Business premises held in an SMSF are generally out of the reach of creditors if individual fund members are declared bankrupt – subject to claw-back provisions in the Bankruptcy Act.
</li>
</ol>
Article continues on the next page. Please click below. 
<hr class="system-pagebreak">
Cons
<ol>
<li>
Potential conflicts if family business struggles to pay rent While the principals of a troubled family business may need the premises to keep trading, the family SMSF’s trustees – who are often the same people – must maintain the fund for the core or sole purpose of paying member benefits. Additionally, funds are prohibited from providing financial assistance to members, says Murden. This includes giving rent relief to family businesses in financial difficulties. 
</li>
<li>
High-cost business premises can dominate an SMSF’s portfolio This can make it to diversify a fund’s portfolio to spread investment risks and opportunities. When preparing their mandatory investment strategies, SMSF trustees must consider such factors as investment risk, portfolio diversification, liquidity of investments, ability to pay member benefits and the members’ circumstances. Peter Crump, superannuation strategist for ipac South Australia, says that super funds are not legally required to diversify their investments but emphasises that trustees must consider diversification when preparing their investment strategies. Indeed, some fund trustees specifically decide to have SMSF portfolios dominated by a single property asset, such as the premises of their businesses, perhaps after considering the diversification of their other super and non-super investments. 
</li>
<li>
It may be more tax-effective to gear business premises outside super Much will depend on the circumstances. First, the superannuation tax rate is much lower than most personal marginal tax rates, thus providing potentially lower tax deductions for negative gearing. Second, lenders usually require a much higher deposit for SMSF gearing, which means a property is likely to remain negatively-geared for a relatively short period – if at all. As well, SMSF trustees should be cautious about relying too much on the possibility that the business premises will eventually be sold when the asset is backing the payment of a pension and thus becomes exempt from CGT. Crump suggests that trustees recognise that the fund may well sell the property before it becomes exempt from CGT. 
</li>
<li>
Potential costly traps in conditions for super gearing SMSFs should gain quality professional advice to ensure compliance with the strict conditions allowing funds to borrow. Mistakes can be costly. SMSF Trustees must enter a limited recourse borrowing arrangement and a geared asset must be held in a separate trust until the load is repaid. Lenders cannot make a claim against any other assets of the super fund in the event of a default on the loan. 
</li>
<li>
SMSF could face severe financial setback following loan default Despite the requirement for a limited recourse loan, an SMSF that defaults on a loan to buy business premises could lose its sizeable deposit plus capital repayments and payments of interests and costs. Upon a property’s forced sale, a defaulting fund would be paid whatever is left after the lender recovers any outstanding amounts including the cost of a forced sale and the discharge of the mortgage.
</li>
</ol>
This article first appeared on <a href="https://www.SmartCompany.com.au" target="_blank">SmartCompany</a>. 
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mlaurence-vhAHaLZT8y

Should your SMSF own your business premises? The pros and cons

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GUEST OBSERVATION
Former Prime Minister Paul Keating recently suggested that self-managed superannuation funds (SMSF) should be restricted from investing in residential property
Keating told the Financial Review: “If I was treasurer today, I would be looking very hard at the whole entitlement or availability of debt to SMSFs. They have gearing available to them and, of course, many of them are taking the option of buying residential property.”
According to the latest Australian Taxation Office (ATO) SMSF statistics, real residential property represents 3.5% of the value of all assets held in SMSFs.  This level of investment has been consistent since 2009 with the bulk of properties worth between $200,000 and $1 million.  SMSF investment in commercial property is around 12%.
However, what has changed is the number of investors with an average of 1,200 new investors using their SMSFs to purchase residential property each year.  The explosion in limited recourse borrowing arrangements which have increased 1,758% between June 2009 and June 2014.
For many SMSFs however, there are some very big risks if the borrowing arrangements and property purchases are not put in place correctly.  If your SMSF breaches its compliance obligations, it is at risk of being deemed non-compliant and losing its concessional tax status and the trustees also risk being fined personally under the ATO’s new penalty powers that came into effect on 1 July 2014.
Here are the top SMSF property issues:
<ol>
<li>
Should your SMSF buy a property? Liquidity, diversification and cashflow.  The Superannuation Industry (Supervision) Act (SIS Act) requires trustees to take heed of these elements when making any investment.  When an SMSF invests in real property, there is a risk that the trustees are putting all of the fund’s ‘investment eggs’ in one basket and the rate of return will not be enough to meet the fund’s obligations. Funds in, or entering, pension phase need to meet the minimum pension drawdown requirements.  The question is, will the rental yield meet the ongoing expenses of the fund including pension payments?  Funds are required to increase the minimum pension drawdown over time: 4% at age 64, and 6% at age 75.  That's an increase of 50% in draw down obligations.  Will rent increase by 50% to keep pace? But what if a member wants a lump sum and not a pension, where will the immediate cash come from? What about when a member dies?  How will the benefits be paid out from the fund? You can't sell one room of an investment property. 
</li>
<li>
Can my SMSF purchase my investment property? A common question that often comes up is, can my SMSF buy a residential rental property, holiday home, or house from me or someone related to me?  The answer is no, not unless the property is business real property (a property used wholly and exclusively for business).  And, in most cases, residential property will not meet the requirements to be business real property.  It’s important to bear in mind that the penalty for breaching the related party investment rules is up to 12 months in jail. 
</li>
<li>
Improving a property If your SMSF has borrowed money to purchase a property, it cannot use any part of those borrowings to improve that property.  Also, a SMSF cannot borrow money to repair an asset it already owns outright. However, a SMSF can use its own money to improve or repair a property acquired with borrowings, as long as the improvements do not result in the asset becoming a different asset.  For example, the trustees could not change a residential property into a childcare centre.  Or, turn a vacant block of land into an investment property. Take the example of a SMSF that borrows to buy a residential house on a large block of land ripe for development.  The fund cannot subdivide the land and build another house because the borrowing rules prohibit a change in the character of an asset bought with borrowed money until the borrowings are extinguished. 
</li>
<li>
Getting the essentials wrong The common problem areas for SMSF trustees are often simple things in the rush of the moment or simply poor structuring. The most obvious example is when a property is purchased by an SMSF but the contract is in the name of the individuals.  Sometimes people just get carried away and make the purchase without thinking through the details.  Or, where there is a related entity involved like a unit trust but the unit trust was not established before the property was purchased or the incorrect name is inserted on the contract or registered with the titles office
</li>
</ol>
Shukri Barbara is principal adviser at Property Tax Specialists.
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ShukriBarbara-XZhfVURjbR

The top four SMSF property investment issues

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Investment in residential property through self-managed superannuation funds has risen 11% in the past year. 
The big increase in property investment by SMSFs is revealed by the Australian Securities and Investments Commission in its submission to the latest parliamentary inquiry on home ownership. 
"As at March 2015, the value of residential real property investments through SMSFs was $21.78 billion … up from $19.49 billion … in March 2014," the ASIC submission said. 
Despite the growth, residential property still makes up less than 4% of total Australian and overseas assets held by the 500,000 SMSFs. 
The Reserve Bank of Australia also observed that "although the share of the housing stock owned by these funds is small, it has grown quickly". 
Since the law changed in 2003 to allow SMSFs to borrow money, concern has increased about the influence of the small super funds on the housing market. 
SMSFs are the fastest growing sector of the superannuation industry and investment in property through SMSFs is consequently also growing, ASIC noted.
As at March 2015, the value of residential real property investments through SMSFs was $21.78 billion, or 3.7% of total Australian and overseas assets, up from $19.49 billion, or 3.6% of total Australian and overseas assets, in March 2014.
"There has been an increase in investment in residential real property through SMSFs of 11.78% from March 2014 to March 2015, and an increase of 58.69% since March 2011.
"ASIC’s primary role in relation to SMSFs is to regulate the gatekeepers—the financial planners, accountants, auditors and providers of products and services to SMSFs.
"We want to ensure that those who are advising retail clients about establishing and investing through SMSFs are providing good quality advice.
"We consider that gatekeepers have a critically important role in ensuring the overall health of the SMSF sector is sound.
"ASIC has publicly warned investors about misleading advertisements regarding the use of SMSFs.
"ASIC has also taken regulatory action in relation to the promotion of investment in residential property through SMSFs in a number of instances, including Money Choice, Charterhill and Park Trent," the submission noted.
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jchancellor-FAypfDUnLy

SMSFs spending on housing up 11%: ASIC

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ASIC has provided two information packs designed to better the advice given by advisers on investing in self-managed superannuation funds.
The downloadable documents stress ASIC's view that an SMSF with a starting balance of $200,000 or below is unlikely to be client-centric and more likely be investigated by ASIC.
ASIC Deputy Chairman Peter Kell said it is important that consumers receive good quality advice that will assist them in making informed decisions about their retirement savings.
'ASIC wants to ensure that only those investors for whom an SMSF is suitable are advised to establish an SMSF and that our expectations around the standards of advice are clear.
'SMSFs are a key priority for ASIC and we will continue to target inappropriate advice about SMSFs in our surveillance work,' Mr Kell said.
ASICs information packs can be downloaded <a href="https://www.asic.gov.au/about-asic/media-centre/find-a-media-release/2015-releases/15-192mr-asic-releases-guidance-on-smsf-advice/" target="_blank">here</a>.
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mick.cee-iDmgDDAmu8

ASIC offers to help SMSF investment advisers

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According to SMSF Association CEO and managing director Andrea Slattery, the cut in the official interest rate to a new low of 1.5 percent will hurt SMSF trustees who have large cash balances in retirement phase.
“Although this low interest rate environment is cause for concern for some trustees, the Association is, however, greatly heartened by the fact that a current research report shows that those SMSFs in the transition to retirement or pension phases are typically coping “very well”, she said.
“Research by the SMSF Association and the retirement experts Accurium shows that the medium average return of funds in these two phases of transition to retirement and full retirement is 4.2% – a real return of more than 3% after inflation, an excellent result in this volatile investment environment. 
“Quite clearly such a real return shows SMSF trustees are getting good advice and are making informed decisions to ensure they are both safeguarding their capital and generating an income.” 
Slattery says the research should help dispel the myth that trustees – especially in the retirement phase – are a one-trick pony with their money only in cash or fixed deposits and blue-chip Australian equities.
“The reality is trustees have been able to find ways of diversifying their investment portfolios to generate healthy returns after inflation, especially considering low interest rates and difficult investment markets, highlighting, yet again, the value of sound strategic advice," she said.
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j.ballantyne1990-6AQqhLzZaK

SMSF trustees in retirement phase set to be hurt after official RBA rate cut

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GUEST OBSERVER
Most Australians entrust their super funds to professionals but you can control your own superannuation and invest your contribution yourself.
Managing your super not only gives you the opportunity to take matters into your own hands, you may also save thousands of dollars on fees.
However, you need to know if managing your own super is right for you.
The biggest advantage of setting up your own SMSF is control. You can invest your money the way you want to – in companies, a property or a fixed interest term deposit.
You can choose among a wide range of investment options like direct mortgages, bank deposits, managed funds, direct property and shares.
Another advantage of DIY SMSF is lower fees. If you have over $300,000 in your superannuation, you may be able to operate your SMSF for less than the annual management fees of a company.
You can also use gearing and leverage to purchase assets like shares and property to expand your investment portfolio faster.
Remember that contributions to your SMSF are tax deductible so you can save more tax through franked dividend income and timing your capital gains carefully.
SMSFs also let you buy other assets for a maximum of 15% tax. SMSFs can continue indefinitely and family members may still enjoy this benefit even after the member's death.
However, you should be aware of the disadvantages, too. As a trustee, make sure you comply with super and taxation laws otherwise, you can be charged a hefty fine and even be imprisoned.
You also have to be savvy about investing to ensure that your SMSF is earning more than what a super company could earn. If not, you can choose to appoint brokers or advisors for a fee.
You will also be required to meet all record-keeping and reporting obligations such as transactions and contribution records and annual tax returns.
Just the same, you may want to ask the experts to handle this for a fee. Another downside of setting up your own SMSF is it may be less diversified than it could have been if handled by a superannuation company.
Note that gearing may add to the risk and though super funds sometimes come with insurance coverage, you still have to get an independent life, income protection and total permanent disability insurance that you need.
Do you think you can set up your own SMSF? Why don't you assemble a team of professionals, such as a lawyer, experienced investor, SMSF expert and financial partner to help you?
You can start with a solicitor, accountant, investment strategist and financial planner. Check their fees and accreditation and don't be afraid to get a second opinion.
ED CHAN is founder and non executive chairman of <a href="https://www.chan-naylor.com.au/" target="_blank">Chan &amp; Naylor Accountants</a>.
<a href="https://www.chan-naylor.com.au/contact-us/?utm_medium=propertyobserver" target="_blank">Click here</a> to schedule a chat or call one of their <a href="https://www.chan-naylor.com.au/contact-us/?utm_medium=propertyobserver" target="_blank">local offices</a>.
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echan-hSGJw4wwC5

How to decide if you should set up your own SMSF: Ed Chan

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EXPERT OBSERVATION
While there are a large number of cryptocurrencies in existence (currently over 1600), this article will focus on Bitcoin for simplicity. Our comments contained here may apply to other cryptocurrencies with the same characteristics as Bitcoin.
What is Bitcoin?
As a very basic explanation, the Bitcoin network is a peer-to-peer payments network that uses public key cryptography to validate transactions involving Bitcoin and to generate new Bitcoins. This network is ‘decentralised’ in that it is not controlled by any government or other central authority.
Bitcoins are created via ‘mining’. This is a process where computer processing power is used to verify Bitcoin transactions and add to the public Bitcoin ledger, known as the block chain. By performing this task the miners may receive new Bitcoin.
Bitcoins in existence may be sent and received via an ‘address’, a unique alphanumeric identifier. A person proves their ownership of a Bitcoin using a public/private key pair. While the public key is known to all and corresponds to a specific Bitcoin, the corresponding private key is kept secret within a digital wallet. The use of the public/private key allows a person to transfer Bitcoin to another address. These transactions are verified by others in the network and added to the public ledger.
Generally, a person would purchase Bitcoin using their own address/wallet privately or via an exchange using a broker (similar to a share trading broker) and if needed transfer the purchased Bitcoin to their own address/wallet.
Can an SMSF invest in Bitcoin?
Any SMSF investment is subject to the regulations under the Superannuation Industry (Supervision) Act 1993 (Cth) (‘SISA’) and the Superannuation Industry (Supervision) Regulations 1994 (Cth) (‘SISR’). This article does not intend to determine if any specific investment is permissible under superannuation law but generally discusses areas that may need to be considered prior to an investment in Bitcoin. Broadly, there is no specific prohibition on an SMSF investing in Bitcoin but certain factors must be considered.
Investment Strategy
Under s 52B of the SISA and reg 4.09 of the SISR, the trustee of an SMSF is required to formulate, review regularly and give effect to an investment strategy that has regard to the whole of the circumstances of the fund including, but not limited to, the following:
(a)         the risk involved in making, holding and realising, and the likely return from, the fund's investments, having regard to its objectives and its expected cash flow requirements;<a id="LPlnk629164" class="OWAAutoLink" name="x_paragraphsub" href=""></a>
(b)         the composition of the fund's investments as a whole including the extent to which the investments are diverse or involve the fund in being exposed to risks from inadequate diversification;
(c)         the liquidity of the fund's investments, having regard to its expected cash flow requirements;
(d)         the ability of the fund to discharge its existing and prospective liabilities; and
(e)         whether the trustees of the fund should hold a contract of insurance that provides insurance cover for one or more members of the fund.
The SISA and SISR do not specify a particular level of risk that is acceptable for a fund’s investment strategy. This would ultimately depend on the risk tolerance of the trustee and members.
If a person suffers loss or damage as a result of a contravention of a covenant imported in an SMSF deed by the SISA, such as the requirement to formulate an investment strategy, they may take action against a person involved in the contravention to recover the amount of the loss or damage. In an SMSF context, it may not be viable for a member to take action against themselves or the corporate trustee. If an adviser assists a client to invest in Bitcoin while the SMSF governing rules do not authorise such an investment and a member suffers loss, the adviser could be exposed to legal liability.
Further, it should be understood that SMSF trustees are in a fiduciary relationship in respect of fund members and any other beneficiaries of the fund. Due to the nature of a fiduciary relationship, SMSF trustees are under the highest of duties to act in the best interests of the SMSF’s beneficiaries. In addition to the various state and territory trustee Act obligations which may apply, s 52B(2)(b) of the SISA places the following covenant on an SMSF trustee:
to exercise, in relation to all matters affecting the fund, the same degree of care, skill and diligence as an ordinary prudent person would exercise in dealing with property of another for whom the person felt morally bound to provide.
The investment strategy for an SMSF must allow for investing in Bitcoin. However, the question of whether such a strategy is prudent for an SMSF will depend on the circumstances of the fund. Considering the volatility of Bitcoin and the fact that it appears (currently) to offer only speculative capital growth opportunities there is clearly a high risk inherent to any Bitcoin investment. On that basis a prudent SMSF trustee may decide that only a small component of a fund’s overall investment portfolio should be made up of Bitcoin or other cryptocurrencies. What is prudent in any situation would depend on the particular circumstances of the fund, such as how close the members are to retirement.
While the DBA Lawyers SMSF deed specifically excludes the rules regarding prudent trustee investment considerations under the various state and territory trustee Acts, not all SMSF deeds will do this. If these provisions haven’t been excluded under a Fund’s deed the Trustee may find them difficult to comply with when investing in Bitcoin.
Governing rules of the fund
As well as the regulations contained in the SISA and the SISR an SMSF trustee will be bound by the governing rules of the fund relating to investment. An SMSF trustee should ensure the governing rules expressly allow them to invest in Bitcoin. As older SMSF deeds are unlikely to provide for this, a variation of the fund’s governing rules may be required prior to such an investment.
Requirement to identify trust assets
A possible issue with SMSFs investing in Bitcoin is the requirement for a trustee to be able to identify the assets of the fund. The Bitcoin market ultimately allows anonymous holdings of Bitcoin. Accordingly, processes should be put in place to ensure that a trustee can evidence any Bitcoin is held as trustee of the SMSF. This could include using the fund’s bank account when purchasing, passing relevant trustee resolutions, ensuring any exchange account is in name of the SMSF trustee acting as trustee, creating a fund-specific email address, completing statutory declarations and otherwise ensuring good documentary evidence exists to satisfy an auditor and the ATO. Prospective advice should be obtained on these requirements prior to investing in Bitcoin. 
SMSF trustees should also ensure they take appropriate action to secure the fund’s property. In relation to Bitcoin, this could include ensuring private keys are kept securely.
Acquisitions from a related party
Section 66 of the SISA prohibits an SMSF trustee from acquiring an asset from a related party of the fund. While s 66(2)(a) provides an exemption for the acquisition of a listed security acquired at market value, any Bitcoin holdings will not meet the definition of a listed security in the SISA and so care should be taken to ensure this provision is not contravened.
Further, while ‘acquiring an asset’ does not include accepting money, the ATO has stated that it does not consider Bitcoin to be money nor Australian or foreign currency.
Hedging/Derivatives and Bitcoin
A Bitcoin exchange may allow a user to hedge their Bitcoin against normal currencies or other cryptocurrencies which could involve giving a charge over the Bitcoin holdings. An SMSF trustee is prohibited from giving a charge over the assets of the fund. However, an SMSF is able to give a charge over assets when investing in derivatives if it is in compliance with the SISR. This exemption is only available to SMSFs obtaining derivatives through an ‘approved body’ (subject to a number of other requirements). As no Bitcoin exchange is an ‘approved body’ for the purposes of the SISR, any derivative instrument or hedging that involved a charge over the fund’s assets would be in breach of the SISR.
Valuations and superannuation caps
As has been shown in recent times, the price of Bitcoin can fluctuate widely and rapidly. Trustees and members should be aware of the value of a member’s interest in the fund to ensure relevant superannuation caps aren’t breached. Sharp rises in the value of Bitcoin could result in a member’s total superannuation balance being over the total superannuation balance cap and a member not being eligible to make any further non-concessional contributions to the fund and may affect other caps such as the $500,000 cap for unused concessional contributions (applying from 1 July 2018).
Tax treatment of Bitcoin
This article does not consider the tax treatment of Bitcoin and other cryptocurrencies. The ATO have released a number of tax determinations on the treatment of Bitcoin. Broadly, the ATO’s position is that Bitcoin is a CGT asset for capital gains tax purposes. Specific tax advice should be obtained as part of any investment considerations.
Conclusion
An SMSF trustee is not specifically prohibited from investing in Bitcoin or other cryptocurrencies. However, as reflected above, there are numerous compliance aspects which must be considered. Ultimately, a trustee should act prudently and in accordance with the fund’s governing rules and investment strategy.
Clients should obtain written advice before investing in Bitcoin to ensure they obtain clearance on all of the compliance aspects.
Naturally, for advisers, the Australian Financial Services Licence obligations under the Corporations Act 2001 (Cth) and tax advice obligations under the Tax Agent Services Act 2009 (Cth) need to be appropriately managed to ensure any advice is appropriately provided.
This article is for general information only and should not be relied upon without first seeking advice from an appropriately qualified professional.
DBA Lawyers hold SMSF CPD training at venues all around Australia and online. For more details or to register, visit <a id="LPlnk360475" class="OWAAutoLink" href="http://www.dbanetwork.com.au/" target="_blank">www.dbanetwork.com.au</a> 
Shaun Backhaus, Lawyer and Daniel Butler, Director, DBA Lawyers 
 
 
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