Thanks for this Terry, for any else interested I also followed the below questions up with a meeting with my smsf accountant (who is also an smsf auditor) I will try and paraphrase his answers.
Looking to purchase a unit that requires a minor cosmetic reno (thats what I do best so Im sticking to the formula) - I often buy houses outside smsf but a unit this time for location. No major renos that would fundamentally alter the asset and I know I have to use funds for the reno, no borrowings as its likely to be deemed an improvement upfront not maintenance.
My questions:
1 When I reno the unit (looking to take approx 2 weeks shortly after it settles) can i spend smsf funds to pay for accommodation close the the property and flights? My reading thus far tells me it could be a breach to stay in the unit, so I was thinking something down the road like a van park or motel.
I would have concerns that there is a potential for non-arms length acquisition from a member here. I imagine you are going the reno yourself as its cheaper...Perhaps that's a acquisition ? Prohibited ??
2 I am also interested in using smsf funds for flights but mostly concerned about accommodation cost as I might drive to fit more tools and the car is already salary packaged so the petrol is already gone cash flow wise in my mind and at least tax effective - so flights as a separate question - can they be done with smsf funds?
see above, no travel expenses cannot be incorporated into a total reno budget and paid by smsf
3 While I am there are other costs also able to be spent from smsf funds? (like food, reno supplies, tools etc) I am not looking to claim any salary, claim time or pay myself for this job (i am not a builder) but if this were possible then Im listening.
4 When I visit it once every 1-2 yrs after this to inspect or conduct maintenance what are the rules around using smsf funds to do this?
The Trustee cannot be "remunerated". And the fnd cannot acquire from a member / trustee. Might be a serious issue here and a breach of the sole purpose test too.
5 My current understanding and contacts in mortgage lending indicate St George 80% lend with corp trustee and offset is one of the best smsf loan products on the market - should I be considering any others for this property?
Still in the lead for me but NAB seem more flexible on the property type
My overarching goal is that I don't want to spend more (or any if possible) of my own private funds than required for this property and I am happy to buy well under my buffer zone (price bracket) to ensure adequate funds are available for the reno including travel then also leave a comfy buffer for servicing etc.
One of the most simple ways to overcome the personal expenses issue is to personally incur those costs and treat them as a deemed non-concessional (or concessional if you meet the 10% test) contribution provided its all arms length. NO MARK UPs !! I would avoid reimbursements and use of the fund for what may be contentious outgoings.
Use of a external tradies may circumvent all these issues.
s66 of SIS Act is very simple...It prohibits acquisitions from a member, associate, relative etc.... There is no minimum threshold either.