Self-managed super funds (SMSFs) are undeniably complex, and they’re made more bewildering by ever-changing rules. DomaCom, a Melbourne-based fractional investment fund manager, is seeking an action in the federal court for a declaration that DomaCom sub-funds are not in-house assets or related trusts for the purposes of the SIS (Superannuation Industry Supervision) Act.
The ruling would confirm that SMSFs can invest in property sub-funds when the tenant of the underlying property is a related party of the SMSF.
Arthur Naoumidis, CEO at DomaCom, said the ability to use superannuation to help people into homes is “clearly a topical issue in Australia.” He also noted that the DomaCom Fund could play a key role in “solving this issue whilst still protecting the assets of the SMSF”.
“The unique arm’s length structure of the DomaCom Fund protects the SMSF assets whilst generating commercial rates of income and capital return that the underlying residential property delivers,” Naoumidis said.
Residential property can be used as an anchor asset class for the superannuation portfolios of generation X and generation Y investors. Superannuation portfolios can then be expanded to other asset classes later in life. “The Gen X/Y investors can then rent the property and acquire more of the interest in the related sub-fund as time goes on,” Naoumidis added.
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