Change SMSF strategy after a year

Discussion in 'Superannuation, SMSF & Personal Insurance' started by JJ2017, 25th Feb, 2017.

Join Australia's most dynamic and respected property investment community
  1. JJ2017

    JJ2017 New Member

    Joined:
    7th Feb, 2017
    Posts:
    2
    Location:
    Darwin
    I'm about to set up a SMSF and have a few questions relating to changing smsf strategies after a year or so.
    If my initial SMSF strategy is to buy a vacant block of land ($550) 5kms from the CBD and hold onto it for 10+ years BUT, let's say, after a year or so I change my mind and decide that I'd be much better off investing in residential property that has a dwelling and rental income, does anyone know if I am am I able to:

    1. After a year or so change my strategy to new strategy (sell land and buy residential property with house)?
    2. If I sell the vacant block, can I sell it back to myself (@ independently valuated market price) so that I can add it to my personal real estate investment portfolio? I'm aware that I can sell it to myself at market price but can I do it after a year?

    Reason for this is, I know the real estate market here is Darwin is slowing down so I'm thinking that IF I do find a residential property with great rental yields in a years time or more then I should invest in a new asset type that has good rental returns.

    I know most of you will probably say, why don't I just wait till this happens. I could but I've found a relatively cheap block I'm thinking of buying now using my smsf. I guess I'm basically wanting to find out how flexible smsf's are. If I set a strategy, am I going to be penalised if I change it after a year.

    I've done searches on here and couldn't find anything. But advanced apologies if this has been asked already and I just didn't use the search function properly.

    Thanks to all that can help.
     
    2 people like this.
  2. Hodor

    Hodor Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    2,238
    Location:
    Homeless
    Are you sure you can purchase a vacant block of land in a SMSF? I thought vacant land didn't qualify. Interested to hear.
     
    2 people like this.
  3. Simon Hampel

    Simon Hampel Founder Staff Member

    Joined:
    3rd Jun, 2015
    Posts:
    12,386
    Location:
    Sydney
    2 people like this.
  4. JJ2017

    JJ2017 New Member

    Joined:
    7th Feb, 2017
    Posts:
    2
    Location:
    Darwin
    From what I've read on SMSF rulings and various other online resources, yes i'm sure you can buy vacant land with smsf. There are strict rules if you're borrowing to invest. e.g.
    SMSFR 2012/1
    LRBA does not allow you to build a house on a vacant block of land that's owned by the smsf.
     
    2 people like this.
  5. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

    Joined:
    18th Jun, 2015
    Posts:
    41,569
    Location:
    Australia wide
    1. yes could be possible
    2. yes
     
    2 people like this.