DomaCom seeks court ruling to exclude sub-funds from SIS Act

Listed fractional investment fund manager DomaCom Ltd is seeking a Federal Court ruling to declare that its sub-funds are not in-house assets or related trusts for the purposes of the Superannuation Industry Supervision Act. 

Such a ruling would confirm that SMSFs can invest in property sub-funds where the tenant of the underlying property is a related party of the SMSF, the fund said in an ASX statement.

It said that DomaCom subsidiary DomaCom Australian Limited has “supported  an action in the Federal Court for a declaration that DomaCom sub-funds are not inhouse assets or related trusts for the purposes of the SIS (Superannuation Industry Supervision) Act”. 

DomaCom chief executive Arthur Naoumidis noted that the ability to use superannuation to help people into a home was a topical issue and DomaCom Fund could play a key role in solving it while still protecting SMSF assets. 

“The unique arm’s length structure of the DomaCom Fund protects the SMSF assets whilst generating commercial rates of income and capital return that the underlying residential property delivers,” he said.

Gen X/Y investors could use residential property as an anchor asset class for their superannuation portfolios, expanding to other asset classes later in life. 

These investors could then rent the property and acquire more interest in the related sub-fund with time, he added.

“We have been working for several years to solve the growing problem of affordability among our young in their quest to buy a home and believe that our fund may provide the solution,” Naoumidis said.

Earlier this year, DomaCom invested in a property in Victoria’s prime Western Districts pastoral land and had 90 retail investors.