SMSF Purchasing Options

Hi I'm looking at purchasing a IP I've been chasing for a few years now(sentimental purchase). I've just been approved for the loan. I'll be purchasing in a company structure to avoid land tax in the state. As it's a very longtime hold I'm not fussed about cgt discount.

I've been thinking about the possibility the past few days of purchasing it under a personal PTY LTD company I already own and with my SMSF(if possible) to limit the personal capital I have to put in so I can move onto my next purchase quicker. Can you do a split purchase agreement with finance? Any cons I should be aware off?

 

Only if each is funding their shares of the property by cash or money borrowed against other property.

 

Thanks for the reply Terry. Just to clarify so you can finance but you have to use existing properties in each entity as security?

 

The company and the SMSF Trustee or Custodian Trustee could buy as tenants in common, but there wouldn't be a lender willing to lend if that property was used as security, but legally it could be possible.

If the SMSF Trustee was a shareholder of the company that bought the property then the property couldn't be used as security for the loan.Similar with a unit trust.

If a related party had some spare cash the company could borrow that cash and the SMSF could potentially borrow separately to the company with its shares/units held on a separate trust.

Get some legal advice before trying this though

 

Hi Terry with this I'm the director of both so if it was bought outright 50/50 from both company and SMSF(I'm the director of both) and a few years down the track would the company be able to access it's share of the 50% equity for refinancing or using as security to help with additional purchases?

 

No

 

Damn. Was worth a shot

 

Company / SMSF deals are far harder than most other chioices. Often prohibited etc. If you have capacity to equity out almost all funds ...except for smsf stake ....on other personal property a ungeared unit trust may be a better and cheaper option if possible. Its strict.