An SMSF can invest in properties overseas as neither the SIS Act or the ATO prohibit these types of investments. This type of investment is not too different to investing in Australian property.
The SMSF must have legal title over the overseas property. Some countries will not allow the SMSF to hold the title of the property. Hence a structure looks like the below graph will need to be set up before the Fund invests in the overseas property:
The above structure is also required if there is borrowing involved in purchasing the property.
Note: The SMSF owns 100% of a Bare Trust \ Custodian Trust. The SMSF has 100% ownership of an overseas investment property and an overseas bank account
There are a number of options and requirements that the fund will have to address before investing in an overseas property.
To see how you can invest in USA Property, please see here.
Yes, a third party can hold the title of the overseas property as long as a Declaration of Trust is set up to reflect that the property being held by the third party is on behalf of the Fund and the ultimate ownership lies within the SMSF.