Moving ownership of a property into a SMSF


I am 56 and my wife is 53 and jointly own a property which we are in the process of reconfiguring into 2 separate lots and intend to build a duplex in the back yard which will be on a separate title.
Can we build the duplex in the name of a SMSF and still have the land in our joint names? or Do we have own the duplex in our joint names and not be able to put it into a SMSF? We will not have to borrow funds for the building but the land will still have a mortgage over it until we sell off the original house at the front.


You are certainly on the right track at your age you should be acquiring assets in super. When you are 60 you could change it to a pension fund so it does not pay any tax on its earnings and once you are 60 or over you can receive income and lump sums from it tax free. I certainly hope your have already arranged your affairs so that you are not paying more than 15% tax. This is done by contributing your earnings to super and taking a transition to retirement pension.

Unfortunately the super fund cannot buy the land off you and buildings attached to land are part of the land therefore owned by the owner of the land. There are some tricks where you could lease the land to another entity to build commercial premises but the involvement of a super fund in this sort of activity with land you already own may put it at risk of failing the sole purpose test. In other words the ATO could find that you did not invest with the sole purpose of retirement but instead to use the superfund’s money to finance the duplex project.

Super funds can now borrow as long as the recourse of the lender, in the event of default, is limited only to the security given and that assets already owned by the super fund are not given as security, so there is potential here for you to use a superfund for property investing but just not with this particular property.

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