A draft ruling by the ATO will open self-managed super funds for improvements to existing properties.
Under the draft plan, the Tax Office will allow members of SMSFs to use their fund to carry out improvements on properties. Previous ATO regulations restricted SMSFs from using fund from any source to make any changes to properties. The new ruling means SMSF members will be able to access their funds for improvements, provided they do not make any fundamental changes to the nature of the property and do not access any borrowings.
The ruling has also clarified the use of borrowings for repairs to newly-acquired properties. Once again, the ATO has ruled to allow borrowings for repairs so long as they do not change the fundamental character of the dwelling.
