SMSFs can buy a property – two ways
- Outright for the full value and purchase costs, legal etc
Borrow to purchase, section 67(4A) SIS (SMSF can’t directly borrow, only acquire by instalment s)
- Need about 30% deposit + costs
- Special loan (Limited or No-Recourse loan) where the lender has security over the property only, and have no security over other SMSF assets
- Special Structure required – Bare Trust borrows and “holds” property within it, until loan paid out, and avoids Stamp Duty and CGT and GST when transferred back to the SMSF
- SMSF has a beneficial interest
- Once loan repaid, legal ownership is transferred to the SMSF
- Expenses – Set Up can be up to $10,000
We’ll cover more details in the next post
To learn more about this and the following topics –
- What’s involved in an SMSF and does it suit you?
- I want my business to be my super – can I do this and how?
- Should I borrow to buy property for my SMSF?
see Seminar page http://wp.me/P1sLJd-f