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ASIC issues warning over ads recommending SMSF property investment through NRAS

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Australian Broker | 23 Oct 2013, 06:00 AM Agree 0
ASIC has offered up a warning to consumers, saying ads promoting SMSF property investment through the NRAS scheme can be 'misleading'
  • not so old broker | 23 Oct 2013, 09:18 AM Agree 0
    Once again brokers bear the brunt because of the few who are willing to really stretch the legal boundaries. Be wary of these "this is too good to be true" claims.
  • Broker Tony | 23 Oct 2013, 09:43 AM Agree 0
    I find it hard to believe an NRAS property could be a competitive investment for a SMSF. The main benefit of the scheme to the investor as I understand it is the tax rebate which is worth nothing if you don't have a tax liability. With rent 20% below market and usual management type costs the investment would have to be very conservatively geared to turn a profit in the short term. If the NRAS property was the only investment in the SMSF (which is what is starting to happen courtesy of the spruikers) the benefits of the investment will be nowhere near what the investor is expecting.
  • Mikeh | 23 Oct 2013, 11:22 AM Agree 0
    I'd also be interested to know the ATO attitude to this type of investment. They are very strong about SMSF providing benefits to its members; it may be that a non-economic investment for the purpose of a tax advantage could be seen as being outside ATO guidelines, and thus a non-conforming fund - resulting in all sorts of penalties and other nasties.
  • Kiran | 31 Oct 2013, 09:54 AM Agree 0
    I speak as a professional facing clients and offering advice across finance, financial planning and property. Lets be clear about the NRAS incentive as Broker Tony has been mis- informed, not his fault, labour politics would not allow one of the best schemes developed by the liberals and launched to consumers by Kevin to get the respect it needs.
    ASIC - is a regulator, but until it regulates property, will try to. Property is a much loved and probably the most stable asset in Australia . But like any investment holds its share of risk, NRAS does make the cash flow seem too good to be true, but so was Jesus Christ, and look at what the regulator of the times did to the son of God. Any investment needs to meet the needs of the investor (Risk, Return and Cash Flow). Property needs a finance strategy to mitigate inherent risks - I presented my thoughts to the IFBF last Friday and am happy to share the same with anyone. NRAS / SMSF / Property are only the vehicles - finance is the fuel and I do believe we have a brilliant opportunity here ....
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