Buying Residential Property off the Plan
Jack and Jill are trustees of the JackJill Super Fund. They wish to purchase a unit in a new housing development. The units have not been built yet, and construction is scheduled to finish in February 2010. The builder requires the Fund to place a deposit on the unit at contract which will be in October 2009. If the Fund were to purchase the unit, would the transaction comply with the Superannuation Industry (Supervision) Act 1993 (SIS Act) and Superannuation Industry (Supervision) Regulations 1994 (SIS Regs)?
This strategy would comply with the SIS Act and SIS Regs as long as the following conditions were met:
- The Super Fund pays the initial deposit on the unit at contract.
- The Super Fund does not make any ongoing construction payments;Upon completion of the construction of the unit, the Super Fund makes a one off payment to the vendor (consisting of the loan proceeds and the balance of the purchase price funded by the Super Fund) to complete the transaction.
- The vendor of the property is a non-related party of the Super Fund.
Please note this article is for information purposes only and does not constitute legal advice.
Should you have any queries or require more information, please contact the team at
McKay Property Solutions on 1300 559 009