Hi,I wish to rent out my principal private residence. I have no mortgage, thus no interest deductions, thus will pay 47% tax on rental income received. (less other expenses).
If I sell my home to a Self Managed Super Fund, would I pay less tax?
Is there other items/options I need to consider ?
(I understand that I would probably have to pay Stamp Duty & other costs such as solicitor fees on the transfer.)
Cia
Superfunds pay 15% tax, so yes you would be paying less. But is this the best way? You cannot mortgage it, and leverage off the equity.
Do you have a loan on your own home? If so, maybe selling the investment house to your own trust may be an option. Use the funds released to pay off your home loan, and you or the trust (depending on structure) will be able t claim the interest as a deduction.
You can then reborrow the money against your home and invest further.
Terryw
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My understanding is that you cannot transfer residential property from yourself to a SMSF. Business property yes. But bear in mind the SMSF cannot have borrowings.
Your PPOR is free of CGT. You are better to use your PPOR as leverage rather than transfer it.
You certainly cannot sell your PPOR or any residential property to your SSMF. Commercial properties come a word of warning and timing is essential due to the changing “related parties’ ruling.
As Terry has pointed out why not consider subject to Stamp Duty consider selling the property to your Trust. Remember as the property will now incur a CGT when you sell it you need to work out how long you intend to retain the property to calculate whether the exercise is viable.
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