One of the issues for consideration by the trustee of a self-managed superannuation fund when it wishes to buy real estate as an investment for the fund is the general illiquidity of such an investment, and how that illiquidity would affect the fund if it required cash.

An SMSF could require cash to pay a member’s benefit once they reach retirement age, to pay a member’s pension, to pay the proposed Division 296 concessional tax on earnings on fund assets over $3 million, to pay a member’s claim for partial benefit release due to temporary or permanent incapacity or to pay a member’s death benefit after they die.