Bank of mum and dad given green light to buy property with SMSF through DomaCom
Crowdfunding platform DomaCom have been given the green light by the ATO to offer a product in where parents can buy property with their self-managed super fund and allow their children to rent it out.
The sole purpose test (SPT) prevents self-managed superannuation funds buying a home and renting it to a related party, however the ATO have allowed DomaCom to go ahead with the practice.
It will allow the younger generation to co-invest with their parents and apply to live in the property.
They will have to pay a market rate rent however.
DomaCom CEO Arthur Naoumidis says he is pleased to confirm that DomaCom has obtained ATO confirmation on how SMSF trustees in DomaCom can satisfy the Sole Purpose Test.
“We thank the ATO for providing this practical clarification so that SMSFs can continue to invest in DomaCom property sub-funds where, subject to certain protocols being observed, related parties may happen to become the tenant of the underlying properties.”
A trustee of a SMSF will have to invest in a Sub-Fund of the DomaCom Fund and sign the sole purpose disclosure statement.
