Many people ask whether, and under what circumstances, a superannuation fund can buy residential real estate.
Here's a straight forward answer to a question posed to John Wasiliev, AFR.
My neighbour lives on a block of land he has subdivided into his house block, plus two others he wants to develop. The subdivision has been approved. He has plans that look interesting and a builder who is prepared to do the work at a reasonable price. Unfortunately, now he can't afford to go ahead and is looking to sell the land. Could my self-managed fund buy this and develop it as an investment?
Yes, your SMSF can undertake the development you outline. But, as with all things in super, the devil will be in the detail, says Peter Bobbin, managing principal at Argyle Lawyers in Sydney. Super funds can buy residential real estate from any unrelated person, provided the purpose is to augment or build on the wealth.
Source: John Wasiliev, The Australian Financial Review, page 26, 23 May 2015
The simple answer is - SMSFs can buy residential real estate from any unrelated person, provided the purpose is to augment or build on the wealth. Not every transaction is straight forward however, so expert advice is recommended.