Leave SMSF property purchases to investors

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The head of a self-managed superannuation (SMSF) advisory firm has hit out at renewed calls to allow people to use super to buy owner-occupied housing.

According to the Australian Financial Review, Harry Triguboff, head of apartment developer Meriton used his speech at the SMSF Members Association's National Conference in Sydney last week to call for changes to SMSF regulations to allow for the purchase of owner-occupied housing.

"I am not fighting for people to buy a home and lease to others, I am fighting for people to have a home,” Triguboff reportedly said.

"If they wait to save enough money, they are losing all the time - when they collect a bit of money, prices go up.  So we must make it easier for them to buy a home,” he said.

Triguboff believes the change would alleviate the pressures of decreasing affordability, but Justin Beeton, managing director of The SMSF Club is staunch in his opposition against any such plan.

“That’s something that I’m completely against,” Beeton said.

“The idea of superannuation is for people to build wealth for retirement and we’re already at the point where people don’t have enough money in their super when they reach retirement age,” he said.

Triguboff is not alone in calling for an expanded access to super before retirement, with then Treasurer Joe Hockey floating a similar idea in early 2015, but Beeton believes policy makers will make what he believes is the right decision.

“The idea of superannuation is for us to overcome the reliance on the aged pension and I don’t think allowing people to take money out of super to use for something like buying their home is going to help us overcome relying on the pension.

“I don’t think we’re likely to see that change made for decades at least though. If we get to the point in say 20 years where people aren’t so reliant on the pension then maybe it will happen, but it’s not going to be anytime soon.”

While he doesn’t foresee SMSF use being expanded to owner-occupied housing in the near term, Beeton does believe there will be an increase in people using them as an avenue for property investing.

“I think this year we’re going to see the idea of people using SMSFs to invest to become more popular now that there’s a bit more certainty around the borrowing rules and regulations.

“The Murray Inquiry in 2014 handed down 47 recommendations, which included a ban on SMSF lending for property purchases. The government last year adopted 46 of those, but didn’t impose the ban.

“Before that there was some real uncertainty in general about the laws, but now people have the confidence that there’s not going to be any changes for a few years at least and that’s going to help.”

Beeton also believes changes that will come into effect from 1 July banning accountants from providing SMSF advice without a financial services licence will be a positive.

“It’s a good opportunity to make sure people are getting the right advice when it comes to investing through an SMSF.

“People looking to invest in property through an SMSF should be getting advice from somebody who specialises in that area. Just putting the wrong name or the not getting dates in the right order on the paper work can have some very serious and expensive repercussions."
 

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