subdivide with smsf

Can I use my smsf to buy vacant land. Cash no loan required.
Then use the smsf to subdivide the land, using cash from the smsf ?
Can I then sell some of the blocks returning the cash to the smsf - leaving a mixture of cash & land in the fund ?
Thanks !

 

I believe that you cannot modify property within a SMSF.

 

Can a SMSF subdivide land? yes but many legal issues to consider.

 

This is only where there is a limited recourse borrowing arrangement.

 

Thanks Terry - what sort of legal issues ?

 

AnSMSF cannot build on vacant land. Taking into account very specific exceptions, SMSFs are only allowed to borrow to acquire a Single Acquirable Asset. Building on vacant land is considered an improvement to the asset (the vacant land), which is strictly prohibited.

 

I disagree

 

The trustee would want to make sure it doesn't breach the SIS Act and Regulations as well as trust law. plus other general legal issues such as succession, structuring of the SMSF, asset protection etc.

 

Thats incorrect.
A SMSF cannot borrow to acquire land and develop it. However if it has cash it can do so and can buy and build on vacant land with no issues if its investmnet strategy considers it prudent. The reason why it cant use borrowed money is the "single acquireable asset" rule in the s67 borrowing rules

 

The OP says it will be purchased with cash, no borrowing required.