If you're considering using your Self-Managed Super Fund (SMSF) to buy property in Kogarah, the 2026 rule changes are critical to understand. Here's what's changed and how it affects Kogarah property investments.
Major SMSF Changes for 2026
1. Payday Super (Effective July 2026)
Employers must now pay super contributions with each pay cycle, not quarterly. For Kogarah SMSF property investors, this means:
- More frequent cash flow into your fund
- Better ability to service LRBA (Limited Recourse Borrowing Arrangement) loans
- Easier planning for property upgrades and maintenance
- Arm's length transactions - No buying from related parties
- Sole purpose test - Investment only, no personal use
- Documentation - Proper valuations and lease agreements
- SMSF must have sufficient liquidity for deposits (typically 20-30%)
- Loan must be from a related party or institutional lender
- Property must be "single acquirable asset"
- Rental income: ~$64,740/year
- Loan repayments, rates, insurance, maintenance
- Need buffer for vacancies and repairs
- Lower entry cost, more accessible for SMSFs
- Near Kogarah Station (T4 line, major interchange) for tenant appeal
- Strong rental demand from professionals
- Land component provides growth
- Family tenant = longer tenancies
- Renovation potential (within SMSF rules)
- [ ] Trust deed allows property investment
- [ ] SMSF has sufficient liquidity (20-30% deposit + costs)
- [ ] Investment strategy updated to include property
- [ ] Independent valuation obtained
- [ ] Appropriate insurance in place
- [ ] Property settlement occurs through SMSF
- [ ] Lease agreement at market rates (if tenanted to related party - avoid if possible)
- CGT within super: 15% (accumulation) or 0% (pension phase)
- Timing: Consider selling during pension phase for tax-free gains
- Market conditions: Kogarah's strong fundamentals support future sale
- Independent valuation
- Transfer tax implications
- SMSF wind-up rules
- Identify compliant Kogarah properties
- Provide market appraisals for existing SMSF properties
- Connect you with SMSF accountants and lawyers
- Advise on rental market conditions
2. 30% Tax on High Balances ($3M+)
If your total super balance exceeds $3 million, unrealised gains will now be taxed at 30%. For Kogarah property investors:
| Scenario | Tax Impact |
|---|---|
| Property bought at $1,295,000, now worth $1,850,000 | Tax on $555,000 gain if balance >$3M |
| Combined super balance near $3M | Property growth could push you over threshold |
3. Increased ATO Compliance Focus
The ATO is scrutinising SMSF property investments more closely, particularly:
Is Kogarah Property Suitable for SMSF?
Kogarah SMSF Investment Profile
| Factor | Kogarah Assessment |
|---|---|
| Median House | $1,850,000 |
| Median Unit | $780,000 |
| Rental Yield | 3.5% |
| Est. Weekly Rent (House) | ~$1245 |
| Capital Growth | Strong (transport & amenities) |
Why Kogarah Works for SMSF
1. Consistent rental demand: Kogarah Station (T4 line, major interchange) ensures strong tenant pool 2. Quality tenant demographics: medical professionals and established families 3. Lower vacancy rates: Kogarah's established medical/hospital precinct with quality housing attracts stable tenants 4. Capital appreciation: Well-serviced suburb with growth potential
Considerations for SMSF in Kogarah
⚠️ LRBA (Borrowing) Requirements:
⚠️ Cash Flow Planning:
Kogarah Property Types for SMSF
Best Options
Units/Apartments ($663,000 - $897,000)
Established Houses ($1,572,500 - $2,127,500)
Properties to Avoid for SMSF
❌ Development sites (SMSF can't develop) ❌ Properties requiring major renovations beyond SMSF's liquidity ❌ Highly specialised properties (harder to sell) ❌ Properties near family members' residences (arm's length issues)
Compliance Checklist for Kogarah SMSF Property
Before purchasing in Kogarah, ensure:
Costs of Buying Kogarah Property via SMSF
| Cost | Estimated Amount |
|---|---|
| Stamp Duty (median house) | ~$83,250 |
| Legal/Conveyancing | $2,000 - $3,500 |
| LRBA Setup | $2,000 - $4,000 |
| Valuation | $500 - $800 |
| Building/Pest | $500 - $800 |
Exit Strategy Considerations
Selling Kogarah SMSF Property
Transferring to Member
At retirement, you can transfer the property "in specie" to members, subject to:
Get Expert Guidance
SMSF property investment in Kogarah can be highly effective, but requires careful planning. I work with specialist SMSF advisors and can:
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Disclaimer
This article provides general information only. SMSF investments have complex rules and penalties for breaches can be severe. Always consult a licensed financial advisor and SMSF specialist accountant before proceeding.
Questions about SMSF property in Kogarah? Call me on 0411 302 668 or contact me here.
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