A friend is looking to do a two lot townhouse development with his parents in vic. He is interested in working out the potential issues. - property currently owned by his parents in super with existing dwelling - goal is to demolish and build two townhouses, one for him, one for parents (can the parents keep one in super or would it have to come outside?) - he wants to subdivide and transfer one title to himself prior to build, to help with finance, this will mean demo will occur prior to tranfer, does this affect anything? - property for him will be ppor, property for parents will be investment - what are the potential issues with super, tax/gst, stamp duty, finance?
He should get some expensive legal advice as should the other 2 parties. A SMSF trustee owns the property or a custodian trustee? He and parents would not be able to live in a property held in a SMSF. The SMSF could potentially sell to him and parents as tenants in common, they can partition it and divided then build. a SMSF held asset is always on capital account so not a revenue issue, but would probably be a breach of trust for the SMSF to demolish the property.
Thanks Terry. Do you have someone you would recommend in melb to give them advice on setting this up correctly?
You really need a tax lawyer for this one. I can highly recommend Vincent Licciardi at HWL Ebsworth he just assisted a client with a complex SMSF matter.
Because of the complexity. Tax lawyers don't come cheap. But expensive is a relative term. Paying some advice now can save 10 times the fee, or more
Yes its far more expensive to stuff up a structure or change it later. Legal fees, duties, CGT , GST and so one are just some. Non-cmpliance for a SMSF is a far greater potential cost. Forced sale, trustee penalties and non-arms length income tax penalties etc can be a massive impact.
