property purchase

Non-geared unit trusts (NGUT) allow taxpayers to co-invest with their SMSF in property. The benefits of the NGUT structure include:

  • Enables a SMSF with limited funds to co-invest in large property purchases.
  • The SMSF can purchase additional units in the NGUT from related parties (at market value).
  • The NGUT has flexibility in issuing and redeeming units.
  • Unlike a bare trust, there are no restrictions on undertaking a property development.
  • Borrowing costs are lower than for limited recourse borrowing arrangements as the non SMSF members can borrow directly from the bank to purchase units in the unit trust.