Hi, I am 70y old and on pension. My SMSF owns a vacant land and I want to build a house on it to live in.
1. Is this OK with the Superannuation rules?
2. Do I need to transfer the property from my SMSF to myself to be able to do this?
3. Transferring it from SMSF to myself I understand would attract a stamp duty. If so, how much stamp duty do I have to pay?
Firstly, please seek professional advice - no response on a forum such as this could ever cover such a complex situation.
To answer your questions:
1. You can not live in a property owned by your SMSF. Your SMSF can build a house on the land it owns provided no debt is involved but you can not live in it.
2. Yes you need to transfer the land (& property out) before you can live in it.
3. You will likely have to pay stamp duty (depending on where the land is maybe you could get an exemption), how much is a function of the value of the land.
There are lots more questions running through my head but all too much for here.
If you’d like to talk some more you can contact me on 0399095800 or email@example.com
All the best.
James has hit the nail on the head here: get advice on what you CAN and CANNOT do.
you can read up on rules and get close to an answer, but the risks for you here are potentially huge.....if the ATO decides you have breached the sole purpose test, you could be up for a large hiding on tax!!!
Also the consequences of drawing amounts out of super might have adverse consequences for you and your pension.....
best thing for you right now is to seek out the assistance of someone who has a firm grip on the legislation, and has experience in dealing with retirees who own property inside a SMSF.....because its a minefield
Hi James & Brendan
Thank you for your responses.
I’ve googled “Can you live in your SMSF property when you retire?” and got this answer like this:
- Your SMSF can purchase property but you can’t live in until after you retire. It can be rented out while you’re working but you can only live in it after you retire.
I think the misunderstanding is coming from that once you retire (and have met a condition of release) you can transfer the property out into your name either as a pension payment or a lump sum withdrawal, then you can live in it.
In your situation, you might look at transfering the vacant land to you then building on it, rather than the other way around.
My office is in North Lakes if you would like to discuss further. I can be contacted on firstname.lastname@example.org or 1300 200 012.
Thank you very much for talking with me and the helpful ideas and advice you’ve given me over the phone. I will certainly have to talk to my accountant first again then the SMSF Auditor who does the audit yearly on my SMSF return.
Again, thank you very much. Truly appreciate it.