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SMSF - sub divide strategy

Discussion in 'General Property Chat' started by Vanders, 26th May, 2016.

  1. Vanders

    Vanders Member

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    I've got a question about selling a property from a SMSF to a member of the same fund. I believe it's possible, the SMSF would just need to pay any capital gains while in the accumulation phase?

    However, I'm looking to buy a property in a SMSF with sub division potential for about 800k. Then sub divide and sell the spare block to myself at market rate (~200k) I would then build an IP on the spare block at a later date. Would this be possible?

    Would there be any issues for the SMSF to borrow to get the sub division in place? Or could I find this from outside SMSF?

    Any advice / experiences would be great.
     
  2. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Yes many issues.
     
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  3. sanj

    sanj Well-Known Member

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    Agreed.

    this is an issue that, if not handled correctly and very thoughtfully could get you in a bit of strife, it's not a PC question but a sit with an expert, pay for specific advice one.
     
  4. Vanders

    Vanders Member

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    Thanks for the replies - yes a visit to an expert is definitely required. Hubby got a bit carried away with his ideas!
     
  5. Lizzie

    Lizzie Well-Known Member

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    The "selling" to a member of the fund is raising alarm bells ... you need to be very, very careful that everything is transacted at arms length - and selling or renting to a member of the super fund is not considered an arms length transaction unless you have formal valuations (not real estate agents) and there can be proven to be absolutely no advantage to the buyer.
     
  6. Redwood

    Redwood Well-Known Member

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    G
    G'day Vanders

    Complex strategy but can be possible. Say you but the property in a company - which is a development company then build two units and sell one to the smsf, this can happen with the right structure/ strategy. Doing it all in the SMSF will be extremely complex and require a number of considerations.

    Cheers Ivan
     
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