[Grow SMSFParticipant@evolveJoin Date: 2009Post Count: 66]

January 9, 2010 - 6:08 am

I have had a look at Personal Name v Trust v SMSF as the structure to purchase argument in a lot of detail recently.

There is no right or wrong answer – it needs to be the best one for your situation – so sitting down with an accountant and a planner may be a good idea.

As mentioned in this thread a major downside with purchasing via an SMSF is the inability to utilise any equity without selling.  One work around solution if the property is positively geared is to pay interest only as long as possible (up to 10 years based on the current loan products out there) and build up the excess cash + super contributions (tax deductible contributions ).  This excess cash can then be used to buy property number 2 etc etc

I also read some where that the typical investment property is sold after 4-7 years – so for a lot of people the inability to access equity in the short term may not be that big of an issue.

Cheryl – you mentioned that you see your IPs as your super – wouldn't be wonderful it be wonderful to retire and have all that rental income funding your travel adventures tax free?  That is the carrot  – but you have to watch out for the stick in the meantime!

I am biased towards purchasing investment properties within super – and I beleive if more people knew what I know, they would be too.

I would love for people to through any questions regarding this topic my way. 

Grow SMSF | Grow SMSF
https://growsmsf.com.au
Email Me | Phone Me

Self-Managed Super Fund (SMSF) Specialist Accountants

[Grow SMSFParticipant@evolveJoin Date: 2009Post Count: 66]

January 9, 2010 - 5:52 am

Not sure if anyone answered your question about the previously paid rates, but I would say they would only become deductible (a portion anyway) when you commence the development.

Any rates paid prior would be 100% related to you PPOR and thus for private and domestic use = non-deductible and would not form part of the cost base of the new units.

Good luck with the development!

Grow SMSF | Grow SMSF
https://growsmsf.com.au
Email Me | Phone Me

Self-Managed Super Fund (SMSF) Specialist Accountants

[Grow SMSFParticipant@evolveJoin Date: 2009Post Count: 66]

January 9, 2010 - 5:45 am

Agree with Richard – no benefit having the property in the Trust.

How is your business set up?  Do you operate via the Trust or the Company (i.e. when your soon to be ex-accountant did the 2009 tax return for your business was it in the name of the company or the trust) ?

A general tip is to keep any valuable assets (such as your house) totally separate to your business.

Grow SMSF | Grow SMSF
https://growsmsf.com.au
Email Me | Phone Me

Self-Managed Super Fund (SMSF) Specialist Accountants