I am looking to buy my first property with my SMSF. Assuming the property is paid off in 10 years,
will I then be able to subdivide the land ? If not, what flexibility do I have, could I sell it to myself ?
Thanks SteveYou will need to ensure that there are no related party transactions ie smsf cannot sell to you or family etc (unless it is commercial property) ie must be an arm’s length transaction.
Development work is also pretty much ruled out as well – you may need specialist advice.
Steve65 wrote:I am looking to buy my first property with my SMSF. Assuming the property is paid off in 10 years,
will I then be able to subdivide the land ? If not, what flexibility do I have, could I sell it to myself ?
Thanks SteveI'm no expert on the SIS Act but if all debt had been repaid and the property transfered from the security custodian (bare trust) back to the SMSF then I can't see a problem so long as the fund uses its own money.
The only other thing that springs to mind is the fac t that a SMSF can not be seen to be running a development business.
Because of this perhaps it would be best that the fund outsource the development work (under a development management agreement) to a unrelated party so as to ensure that the SMSF is dealing with the land on an arms length basis as required by the SIS Act.
I'd be interested in other views.
Does anybody know if a SMSF fund can buy US property ?
hansella wrote:Does anybody know if a SMSF fund can buy US property ?Sure, so long as your investment strategy covers it and the correct legal structure is established.
However the risks are many and this strategy is not for the in-experienced.
I agree with Mike in relation to the transfer of the property from the Bare Trust to the SMSF however feel that the Steve is asking whether the property can be transferred to himself personally which of course breaches SIS.
In relation to the Development as long as the SMSF is not seen as running a business i wouldnt have a problem.
A few years ago I purchased a block of 4 units in my SMSF, strata titled and renovated them and sold 2 off.Again didnt do the work myself although engaged relevant Professionals to complete the project.
Had no issue come Annual audit time.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Sorry Mike Yes good point.
I was assuming he was a mere whim of a lad.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
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