Yes, provided that it uses it own funds to conduct the development. Borrowed funds can not be used for the development.
Borrowed funds can be used to fund the initial property purchase or for repairs and maintenance. Refer Section 67A of Superannuation Industry Supervision Act 1993.
As soon as the repairs and maintenance becomes an improvement the borrowing exemption in S67A will cease to apply.
Therefore, it is essential that trustee understands the difference between repairs and maintenance and improvement.
SMSFR 2012/1 provides numerous examples of what constitutes repairs and maintenance versus improvements. Refer SMSFR 2012/1
If you would like to discuss further please contact us:
McNamara & Company - Chartered Accountants, located minutes from the Melbourne CBD
www.mcnamaraandco.au
Phone +61 3 9428 1062
Email admin@mcnamaraandco.au
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