The new provision on ‘Cross Collateralization’ is reducing the opportunity for property investors to transfer a listed security from a lender to a third party. Bond, share, debenture are other types of assets can only be prescribed by regulation.
From now on, the real estate property will be considered as an in-house asset. Independent value analyzer should determine the value of these types of assets.
Transparency
The new rule compels clients and property investors to acquire listed securities from SMSF trustees at market value. It reduces property investor’s chance of getting a good deal out of market coverage but increases the transparency of business. Off market, transactions often bring about problems in price amounts and transaction dates. But, this new rule will be reducing that problem for good.
SMSF Regulation
According to the new law, SMSF can acquire information on listed securities from a third party investor. However, it is not clear whether the regulations will follow off market rules to get the job done or not. If the rule does dictates to proceed through off market regulations, it is highly unlikely that the information would be totally trusted by investors.
However, this rule indicates that SMSF trustees have to get a market evaluation of the real estate property from an independent valuer who is qualified enough to make right measurements. This process would make the whole program expensive enough for third party clients. For more information, please visit – http://www.lauchlanleishman.com.au/