SMSF News and Strategies Podcast Show · Chris Reed: Certified Practicing Accountant (CPA), FPS and SMSF Specialist Advisor, Director of Business Concepts Group

SMSF NS125: SMSF Property Compliance

·23 min·1 clip

NALI can tax SMSF income at the top rate if dealings are not at arm’s length.

1. SMSF News and Strategies Podcast Show episode 125 is about SMSF property compliance, with Chris Reid and Sarah Powell focusing on the rules around retirement assets and property ownership. 2. Chris Reid hosts the show, Sarah Powell joins as the returning co-host, and both speak from a tax and SMSF compliance perspective. 3. The episode asks what an SMSF trustee must check before buying, renting, valuing, or developing property inside super. 4. Chris opens with the December quarter T-bar due on 28 February and says first-year 2024 SMSF returns are also due on 28 February. 5. He warns that new funds need the 2024 return audited and lodged on time, because being late on a first-year lodgement can raise ATO flags. 6. The hosts then revisit the proposed Division 296 tax on balances above $3 million and say it is still stalled. 7. Sarah says the transfer balance cap will rise from $1.9 million to $2 million on 1 July 2025. 8. She explains that the cap increase may change the timing of pension starts and affect non-concessional contribution strategies. 9. Chris says the episode’s main topic is compliance with property within SMSFs, because property is a major reason people set up an SMSF. 10. He names the key risk areas as the sole purpose test, non-arms length income, market values, and property development. 11. Sarah says buying a holiday house or letting family members live in SMSF property is not allowed. 12. Chris stresses that the phrase 'sole purpose' matters because retirement must be the fund’s only purpose. 13. On NALI, Chris says non-arms length income can be taxed at the top rate rather than at concessional super rates. 14. Sarah adds that related-party business premises must be rented at market value and paid on time. 15. Chris says the fund should behave as if it were dealing with unrelated parties, including pursuing unpaid rent if necessary. 16. On market value, Chris says all fund assets must be reported at market value every year and trustees cannot just roll forward last year’s figure. 17. Sarah says acceptable evidence can include a local agent valuation, comparable sales, or a trustee valuation backed by records. 18. The hosts say auditors also want current titles and evidence that no improper security has been placed over the property. 19. The conversation is practical and compliance-heavy, with both hosts using examples from related-party tenancies and development scenarios. 20. Trustees considering SMSF property, business real property, or property development would get the most value from this episode, while listeners wanting light commentary may skip it.

As heard by us

Property inside super only works when rent, value, and conduct are treated as ongoing compliance duties.

The episode keeps its focus on SMSF property compliance, with market value, arm's-length conduct, and the basic habit of treating related-party dealings like they would stand between strangers.

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Why you'd press play

Keep your SMSF property lease from drifting into an arm's-length problem.

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