Quick question: If one has already reached the land tax threshold as an individual(s) , can one buy the next investment property (or transfer one existing investment property) into one's SMSF? What i mean is does the SMSF itself have ANOTHER separate threshold ? (with exact same 2 husband and wife members ) Thanks!
A trustee of a smsf (NSW ?) does attract a seperate land tax threshold. But the individuals and a smsf are totally distinct. The question is one small part of a broad range of financial matters to be considered. A SMSF cannot acquire residential real estate from any member or associate. It is prohibited - s66(1) SISA
Thanks for that But if the same husband and wife buys ANOTHER separate investment property from the market, that is ok? (with another land tax threshold???)
What i mean is: a) husband and wife buys in joint PERSONAL names : one land tax threshold... b) husband and wife are members of their SMSF and buys an investment property INSIDE and using their SMSF: another tax threshold??
Wow! Background Story: i have a friend who owns her own 2 million PPOR; unwittingly (or wittingly?!) bought another 1.5 million investment property (with cash ie no loans) and finds herself saddled with 10K ( i think at one stage she was paying 13K) land tax every year... Had she known , shouldn't she be settting up an SMSF and purchasing it within her SMSF? ...
To save land to is not a valid reason in itself to buy in an SSMSF, there are many other things to consider. she could have used a company and get a separate threshold even
Cant be fixed without significant duty or CGT or selling costs. There is no SMSF option as its prohibited. And could trigger a excessive contribution concern in any event. Who unwittingly buys anything costing $1.5m ? And doesnt consider ownership. Land tax, Stamp duty and legal advice. She just got a land tax deduction ! Caveat emptor.
A SMSF is not the members. Its a fund established under super law that holds the super of its members. Its regulated by many laws including the Superannuation Indstry (Supervision Act) 1993 and Regulations. It governs all super funds including SMSFs. The rules are very strict. eg s66 says a smsf may not acquire investmnest from a member or associate. If its resi property it is prohibited. No exception. A smsf will have a trustee OR trustees. If its an human it CANNOT have one member who is the same person. If it is a company trustee that company can have one or two Directors including that one member. Or if it has more than one member all must be Director or human trustees. Even when it does the smsf is a different legal entity to the individuals no matter what Its like a company is not the same as the individuals who are Directors or perhaps shareholders.
Got it ...the SMSF is a separate legal entity to its members... My question is still: a) Peter and Mary own their own PPOR and their investment properties in their names 50 % 50% split equally. They have reached their land tax threshold and is scratching their head as they want to buy ANOTHER investment property. b) They have a family SMSF in which they are the only directors/members....and they have 1 million cash inside this SMSF. The Family SMSF proceed to buy the next investment property and own it inside this Family SMSF... Question: Does this SMSF have its own separate Tax Threshold? Yes or No?
