More of the more common investment assets for a SMSF is an investment property. Whilst the ‘great Aussie dream’ of owning property can be a sound idea, what is not is you or your relative staying in it – even if it’s for a night!
Assets where you enjoy the benefit now – ie, getting the use of the asset before your retirement – can be classified as ‘in-house’ asset, and the value of that asset therefore can’t be more than 5% of the value of your fund. Not only can the ATO force you to sell that asset as a penalty, you can be fined thousands and thousands of dollars as well.
So, if you have the urge to enjoy your property now – dont! Call me instead 🙂
Here’s a link to the ATO’s Youtube video about in-house rules. It’s actually quite good and is only 2 mins long. It’s not quite as fun as a cat playing a piano on Youtube, but still pretty worthwhile.