ATO targets property SMSFs

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From the AFR:

The rush by self-managed superannuation funds to borrow to invest in real estate has been described by the Tax Office as a “problem child” that will need urgent correction.

ATO assistant commissioner for superannuation Matthew Bambrick said the tax office was working with the Australian Securities and Investments Commission to crack down on spruikers advising self-managed funds to get into property. “We are getting on the front foot because with limited recourse lending to buy real estate for a self-managed funds we have a problem child,” Mr Bambrick said.

“Watch this space.”

The article goes on to say that the two are coordinating on finding a response to “one-stop-shop consortiums of advisers, real-estate agents, tax advisers and accountants that sell and process ­leveraged real estate investments.” There is no scrutiny because there is no requirement for any licensing in recommending real estate, as MB has noted many times. Australia’s marvelously structured financial advisor market is cashing in:

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Developers are offering advisers between three and 20 times their usual commissions for recommending the property, which are typically off-the-plan apartments, despite the payments being banned for all investment ­products.

We shall see where this goes.

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.