(03) 9720 2922

Jansen Walsh & Grace

 

 





About us

We have 10 years' experience in providing drafting SMSF superannuation deeds and providing advice.  The information on this page is intended to help you if you are buying the property using your SMSF or DIY superannuation fund.  We have another page with additional information on buying investment properties.


We also do the following:

  • purchases of property by a superannuation fund using a limited recourse borrowing arrangement (or just a normal purchase);
  • in specie contributions of property to your superannuation fund;
  • transfers by the custodian or bare trustee to the trustee when the limited recourse borrowing arrangement ends;
  • change of trustee on the title;
  • payment of benefit to a member in the form of an in specie transfer of property.







Warning: avoiding the $1.6 million cap and triggering a CGT event
Some members may dispose of assets to keep themselves below the $1.6 million cap.  However, they should be careful that the sales do not trigger a CGT event.  We advise on strategies for this.


Banks withdraw from SMSF lending.
Most banks have withdrawn from lending to SMSF trustees under limited recourse borrowing arrangements.

Conflicted advice to SMSF trustees to invest in property
ASIC is investing advice being provided to SMSF trustees which is not in the interests of the members.  During the royal commission into banking, it was revealed that an AMP wealth manager had advised SMSF trustees to invest in properties without informing them that he had a 60% interest in the properties he was encouraging them to buy.


Land transfer duty and transfer registration fee
If you are borrowing to fund part of the purchase price, your lender will calculate the land transfer duty and the transfer registration fee.  However, you can calculate the land transfer duty and the transfer registration fee, if you wish.  It does not deal with off-the-plan purchases.

Abolition of off-the-plan duty concession for investors
The concession for land transfer duty for buying an investment property off-the-plan was eliminated on 1 July 2017.

Withholding GST
The purchaser will have to pay one-eleventh (or 7% for margin schemes) of the sale price to the Australian Taxation Office where settlement of a Contract of Sale of land which occurs on or after 1 July 2018, even if the contract was entered into before that date, but subject to the exception for existing contracts entered into before 1 July 2018 where settlement takes place before 1 July 2020.  The vendor is entitled to a GST credit for an amount withheld by the purchaser from the contract consideration but only if and when the purchaser pays the withheld amount to the Commissioner.



Warning about paying Vendor's legal costs
Watch out!  Some vendors are tricking purchasers into unknowingly agreeing to pay part of the vendor's legal costs by disguising it in a special condition in the Contract of Sale.

Land transfer duty payable on transfer property from unit trust to members of SMSF superannuation fund
Trustees of SMSF superannuation trusts have to be careful about taking transfers from related unit trusts.  Subsection 36B(1) of the Duties Act provides that: “No duty is chargeable under [Chapter 2] in respect of a transfer of dutiable property that is subject to a unit trust scheme (the principal scheme) to a unitholder in the scheme if— (a) the duty (if any) charged by this Act in respect of the dutiable transaction that resulted in the dutiable property becoming subject to the principal scheme has been paid ...; and (b) the unitholder was a unitholder at the relevant time; and (c) the transfer is in accordance with subsection (2).”  Subsection 36B(2) provides: “The transfer must be— (e) to the unitholder as trustee of a superannuation fund all the beneficiaries of which were beneficiaries at the relevant time.”  Subsection 36B(5) provides: “(5) In this section— relevant time in relation to dutiable property that is subject to the principal scheme, means the time at which the property first became subject to the principal scheme.” Section 36B only applies to a “unit trust scheme”, which is defined in section 3 of the Duties Act in the following terms:- “unit trust scheme means any arrangements made for the purpose, or having the effect, of providing, for persons having funds available for investment, facilities for the participation by them, as beneficiaries under a trust, in any profits, income or distribution of assets arising from the acquisition, holding, management or disposal of any property whatever pursuant to the trust.”  In Lincara Pty Ltd v Commissioner of  State Revenue [2018] VCAT 1060, Between 1985 and 1996, the trustee of Wandin Valley Farms Unit Trust acquired various properties. On 18 April 2016, the trustee transferred the properties to Lincara Pty Ltd (Lincara). At the time of the transfers, Lincara was the sole unitholder of the trust, and held its units in its capacity as trustee of the G & E Sebire Superannuation Fund (Super Fund).  The Commissioner of  State Revenue assessed Lincara to duty of $412,500 in respect of the transfers.  Lincara lodged an objection claiming that the transfers were exempt from duty under section 36B of the Duties Act 2000 (Duties Act), which applies to property passing to unitholders in a unit trust scheme.  Member Tang decided on 9 July 2018 that the transfers were not exempt from land transfer duty, so that Linacre, the trustee of the SMSF superannuation fund, had to pay $412,500 in land transfer duty to the Commissioner.  The problem was that, as  two of the properties were acquired before the SMSF superannuation fund was established, it would have been impossible for the members of the SMSF superannuation fund to have been members at the "relevant time."

Increase in SMSF membership limit to 6
The Honourable Kelly O'Dwyer, MP, the Minister for Revenue and Financial Service, announced that the Superannuation Industry (Supervision) Act 1993 will be amended with effect from 1 July 2019 to increase maximum number of allowable members in new and existing SMSF funds to 6.  This would be a great boost for small businesses which use an SMSF structure and allow greater flexibility in estate planning and business succession planning.

SMSF audits
The government announced in May 2018 that SMSF funds could be audited every three years (instead of each year) if the trustees have a history of three consecutive years of clear audit reports and have lodged the fund’s annual returns in a timely manner.

SMSF Trust property

Often the trustee of a superannuation fund will enter into a limited recourse borrowing arrangement to purchase a strata title unit.  The property will be purchased and transferred into the name of the trustee of  the bare or holding trust until the amount owing under the limited recourse borrowing arrangement has been repaid.


We have encountered situations where a bank or finance company, in a mistaken understanding of the meaning of “single acquirable asset” in section 67A of the Superannuation Industry (Supervision) Act 1993, has insisted upon the unit being transferred into the name of the trustee of the bare or holding trust and the accessory unit being transferred into the name of the trustee of the superannuation fund.  We have successfully resisted those attempts, because Land Use Victoria will not register such transfers.  The unit and the accessory unit must have the same owner.


Australian Financial Complaints Authority
The Australian Financial Complaints Authority (AFCA) commenced receiving complaints on 1 November 2018.  AFCA replaces the Financial Ombudsman Service (FOS), the Credit and Investments Ombudsman (CIO) and the Superannuation Complaints Tribunal (SCT).


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"How much does it costs?"

For in specie contributions, we charge $1,750 + GST and disbursements payable to the Victorian Land Registry and PEXA.

For subsequent in specie contributions, we only charge $895 + GST and disbursements payable to the Victorian Land Registry and PEXA.