Buying IP in SMSF for later use as PPOR

[Cherry Pro]

Hi

If we buy an IP in our SMSF, can we possibly move into this say 3 years
down the track.

When we move into it, can we still continue to hold in SMSF ?

Thanks
Amelia

 

[Pushka]

When we move into it, can we still continue to hold in SMSF ?

Thanks
Amelia

I doubt it, unless perhaps you might get away with paying at least market rents. Please seek accountants advice, doing this could render your SMSF to be taxed at 48%.

 

[Hoffy]

This would certainly fail the sole purpose test.

 

[Aaron Sice]

ABSOLUTELY NOT - unless you intend the SMSF to sell it to you at market price and pay all CG tax and you pay all SD.

you need to be at arm's length of your SMSF investments. i buy art and rent it out to corporations for an annual return. that is legal. if i were to hang said art in my entry hallway, that is illegal.

see the difference?

 

[BV]

Hi

If we buy an IP in our SMSF, can we possibly move into this say 3 years
down the track.

When we move into it, can we still continue to hold in SMSF ?

Thanks
Amelia

Amelia

Is not as simple as that.
Are you going to be at an age where you can start an allocated pension?
Assets in the SMSF are supposed to provide funds for your retirement and not to provide a roof over your head

People who are eligible for AP usually sell all properties with significant CG and then decide what to do next.

They sell because after the age of 60 all CG is tax free and also because if the SMSF trustee passes away and the properties are inherited by the kids they will be taxed at a high rate.

 

[Cherry Pro]

Thanks all for the clarifications.

Have not been on here for a few days as we have busy reno'ing our latest IP - hard yakka, for sure, but very rewarding.

Bill...now understand what you mean, no, not at the AP age as yet.

Blue Card ... arm's length investment...thanks for sharing your example.

I now know more.

Cheers,
Amelia

 

[tubs]

Actually this is more likely to have bigger implications than tax. Its highly illegal to live in a house owned by your SMSF and would likely to lead to prosecution.

 

[Aaron Sice]

not always tubs.

if you are paying market rent and meeting the obligations that any normal tenant would, then you can argue financial hardship clauses without doing a dodgy - esp if it's a basic 3 or 6 month tenancy agreement - signing a 5 year lease would look very suspect.

sometimes people are forced into this situation.

 

[cdremy]

couldn't you move into the house once you passed your preservation age?