Are you a property investor?
Are you a trustee of SMSF?
Then you should read this article carefully.
Aside from the lower tax rates which apply within a self-managed superannuation fund, the trustees of SMSF can also take advantage of the valuable stamp duty concession provided by Revenue NSW.
Buying commercial real property under a self-managed superannuation fund (SMSF) is seen as a common strategy. But how about if you have already owned commercial properties?
Not everyone knows that you can also take advantage of the valuable stamp duty concession provided by State Revenue, which could save thousands of dollars in duties and taxes along the way.
This concession can be very significant. If the SMSF purchases NSW land/property from a member with a market value of $900,000, the duty which would apply (but for the concession) is $35,835.0. With the concession, the saving in duty is $35,335.0.
Here is the current breakdown on stamp duty for property investors or small business owners looking to move property they own personally in to their SMSF.
Stamp duty imposed by State and Territory governments should always be considered before transferring land to an SMSF. Concessions or exemptions from duty may be available depending on the State or Territory.
Reminder: the land/property must be business real property owned in the personal name of the member of SMSF rather than a company. Certain trust is also eligible as a landowner but please check with our SMSF specialist at BOA & Co.
The following tables set out the details of the stamp duty offices and relevant provisions of the relevant legislation in each State and Territory. This is up to date as at 27 February 2017.
NSW |
Transfer to an SMSF |
| Duty payable | $500 subject to conditions being met. Previously $50 but increased 01/07/2014. Depending on the documentation in place for the transaction you may be able to apply for a retrospective re-assessment and obtain a refund. An SMSF specialist lawyer would be able to advise you on this. |
| Relevant provisions | 62A NSW Duties Act 1997 |
| General description of legislation | Nominal duty is charged on a transfer of dutiable property from a person to a trustee of an SMSF where the: transferor is the only member of the super fund or the property is to be held by the trustee solely for the benefit of the transferor (ie property or proceeds of the sale of the property cannot be pooled with property held for another member and no other member can obtain an interest in the property or proceeds of sale), and the property is to be used solely for the purpose of providing a retirement benefit to the transferor. |
| Documentation | Evidence that it is a complying SMSF as at the date of the agreement/transfer, copy of minutes of meetings of the SMSF stating the intention to have the property transferred to it and confirm that the property was owned beneficially by the transferor member, copy of the SMSF trust deed or a variation to it, showing a non-revocable clause that the property is segregated for the transferor member’s benefit only (follows wording in section62A(2)) |
| Legislation | Duties Act 1997 (NSW) |
| Legislation website | http://www.austlii.edu.au/au/legis/nsw/consol_act/da199793/ |
| Office | Office of State Revenue |
| Website | http://www.osr.nsw.gov.au |
VIC |
Transfer to a super fund |
| Duty payable | No duty subject to conditions being met |
| Relevant provisions | Section 41 Vic Duties Act 2000 |
| General description of legislation | No duty is charged in respect of the transfer of dutiable property made without monetary consideration to a trustee of a super fund, where there is no change in beneficial ownership (again, the property must be held in the personal name of the member and not a company name). A transfer of property to a trustee of a super fund by a beneficiary of the fund does not, for the purposes of this section, effect a change in the beneficial ownership of the property. |
| Documentation | Documents are required – refer to ‘Evidentiary Requirements for Dutiable and Exempt Transactions’ on SRO website |
| Legislation | Duties Act 2000 (VIC) |
| Legislation website | http://www.austlii.edu.au/au/legis/vic/consol_act/da200093/ |
| Office | State Revenue Office (SRO) |
| Website | http://www.sro.vic.gov.au/land-transfer-duty |
QLD |
Transfer to a super fund |
| Duty payable | Ad valorem duty applies |
| Relevant
provisions |
No provision for exemption or concession from duty |
| General description
of legislation |
A transfer of dutiable property is a dutiable transaction. |
| Documentation | Duties office form and documents are required. |
| Legislation | Duties Act 2001 (QLD) |
| Legislation
website |
http://www.austlii.edu.au/au/legis/qld/consol_act/da200193/ |
| Office | Office of State Revenue |
| Website | http://www.osr.qld.gov.au/duties/index.shtm |
There are also other conditions which have to be satisfied. For example Revenue NSW requires evidentiary documentation before these concessions can be granted.
Do you think you may qualify for these stamp duty concessions? Call BOA & Co. accountants in Chatswood on 02 9904 7886 and our SMSF specialist will be pleased to assist you.
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