Fractional property fund manager DomaCom Australian is attempting to have its sub-funds exempt from being defined as in-house assets or related trusts under the Superannuation Industry (Supervision) Act by way of a Federal Court declaration.
If successful, the ruling would allow SMSFs to invest in DomaCom’s fractional property offerings where the tenant of the underlying property is a related party of the super fund.
“The ability to use superannuation to help people into a home is clearly a topical issue in Australia and it is our belief that the DomaCom Fund can play a key role in solving this issue whilst still protecting the assets of the SMSF,” DomaCom chief executive Arthur Naoumidis said.
“The unique arm’s-length structure of the DomaCom Fund protects the SMSF assets whilst generating commercial rates of income and capital return that the underlying residential property delivers.”
According to Naoumidis, removing restrictions affecting SMSF allocations to the DomaCom sub-funds will allow the use of residential property as an anchor asset for generation X and Y members and give them the ability to invest in other asset classes at a later point in time.
“The gen X and Y investors can then rent the property and acquire more of the interest in the related sub-fund as time goes on,” he noted.
As well as trying to secure an easier passage for SMSF allocations to fractional property investments, he said DomaCom was also working toward finding a solution for another issue plaguing Australians.
“We have been working for several years to solve the growing problem of affordability among our young in their quest to buy a home and believe that our fund may provide the solution,” he said.
