Money Dilemma – we are pty ltd and to cover 2 bases we would like to sell an IP zoned 4A with rented house
(for quick capital) to our SMSF at lower than market value (we hope). We have deposit in SMSF but would have to
take loan out for balance (Bare Loan?)
Will this work? and could it be costly?This is unlikely to be considered an arms length arrangement……..and at less than market value………….big can of worms here.
Also the asset needs to be real business premises not resi. On that basis, unless zoned 4A is a business or industrial zoning at present it is resi (not real business premises). No need to worry about bare trust and warrant loan as I doubt you can achieve what you're proposing anyway.
This is merely my understanding, best to check with your accountant and fin advisor who is familiar with SMSF transactions.
I'd tend to agree if the property is zoned residential however many town plans have a '4' zoning for industrial uses. That said, the property could be considered a development site with the house having little or no value (it may even be considered a liability as you will have to demolish it).
In this case you'd be best to seek professional advice.
Thanks for the replies
It is zoned 4A Light industrial. We have a shed at the back of the property and rent out the house (its fenced off) to a tenant.
Under market value was just wishful thinking. Id be thinking 'cause we rent it out to residential we wouldn't fit the criteria.
Would it be worth loosing the little rent we obtain and could we rent it ourselves as a business thus fitting the criteria.Im not familar with 'development site' for SMSF
Cheers
P.S Its a tough area to find good legal advice and someone who sees outside the square
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