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SMSF trustees with geared investments may need to be prepared for possible changes.
The government not only rejected Labor's proposals, which was part of an expanded housing affordability plan, Prime Minister Malcolm Turnbull began playing down expectations about the Coalition doing much at all on housing in the May 2017 budget.
SMSF Association CEO Andrea Slattery said there was "little or no convincing evidence" that the use of borrowing by small super funds was playing a significant role in affecting housing affordability.
Self-managed super funds own 0.18 per cent of the property market and banning them from borrowing will do nothing to bring down property prices or help first-home buyers, she said.
Assistant treasurer Michael Sukkar said Labor's policy was "a half-hearted dog's breakfast".
"Residential property in self-managed superannuation funds accounts for less than a quarter of one per cent of the total value of Australia's housing stock.
Meanwhile..
Economist Saul Eslake, a critic of the decision of the Howard government just before it lost power in 2007 to allow SMSF investment in property, backed the Labor ban, saying SMSFs just added another preferentially taxed way for Australians to borrow to speculate on rising property prices
Former banker David Murray has urged the Coalition to ban self-managed super funds from borrowing and to do so quickly or risk a stampede of further leveraging between now and the next election which would put more pressure on house prices.
Source: AFR April 2017
KEY TAKE AWAY
The topic centres around the $1.6 million transfer balance cap and the $1.6 million limit total superannuation cap or non-concessional contributions were assessed on the net value of assets.
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