smsf buy investment property

Hi Sorry another smsf question ! still getting my head around it all

I have a development site - purely purchased to provide income. ie. 2 lots purchased then amalgamated straight away and subdivided asap into 8 lots. Profits are treated as income and gst paid on all sales. (Its my principal income) There was a existing residential house on one of the lots which is now ready to sell (the 7 vacant lots have sold).
Could my smsf purchase the house in this scenario and then rent it out providing rental income to the smsf ?
Thanks !

 

potentially yes. Best to get some legal advice to make sure

 

There is a complication to what is understood to be "business real property". Being a isolated profit making issue and an enterprise doesnt in itself mean that the BRP test is met. It would be one of those curly ones I would be referring to DBA Lawyers for their advice. If permitted, market value should be used. If it isnt the shortfall may also be a inspecie form of contribution according to the views in TR 2010/1 which can produce some contribution strategies by using that ruling !! However duty would be based on market value. There may even be strategies around a related party loan that is annually repaid by way on a notional contribution under the Limited Recourse Borrowing rules.

I am not so sure the existing dwelling will meet the test at all. The vacant developed land may. The Business Real Property refers to that title, not the activity overall. Thats a further reason I see it as complex.