With the change in Super rules, is anyone out there wise in the way of rural property? Obviously prior to doing anything, I would run it by professional but just thought I would throw thw question out there so I go in armed with a little more knowledge.
Essentially it is not resedential, but neither is it commercial so how is it classified. Would it need to be leased out to a third party or could it be managed in house? Can a family member rent (at market value of course) any residence on the property?
Any insights or previous experience would be greatly appreciated.
Cheers
Mick
Just did some googling and my additional query is does the Familt Retirement Fund still exist and is it appropriate for property investing?
Mick
This is a complex area of law.
Firstly, are you buying the property outright – or borrowing to purchase? If borrowing is involved there are very specific rules – you need to use a property warrant and the current ones available probably would not cover rural property. Also there is significant equity required at least 30% some 50%.
Secondly, unless it is leased to an arms length third party it would come under the "in house asset" rule – therefore could not make up more than 5% of the SMSF fund asset balance.
If the property is used for productive farming you may get it within the Business Real Property rules – but would need to seek legal advice on this.
There are possibilities but there are many little rules to be aware of – definitely one for high quality professional advice.
Best of luck with the adventure.
Thank you for the reply WA,
It seems not a common thing as I can find very little information out. Anybody else?
Mick
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