Immediately after I published my last blog Stamp Duty Requirements on Change of SMSF Trustees I got questions on stamp duty on property transfers to a Self Managed Superannuation Fund. At first I attempted to the answers myself but to ensure ongoing accuracy I am pleased to have Caroline Harley, one of the best lawyers in the SMSF sector review and update this information.
Caroline Harley | Special Counsel
So 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 researched and considered before transferring land to an SMSF. Concessions or exemptions from duty may be available depending on the State or Territory in which the land is situated.
This concession can be very significant. If the SMSF purchases NSW land/property from a member with a market value of $500,000, the duty which would apply (but for the concession) is $17,990. With the concession, the saving in duty is $17,490.
Reminder: the land/property must be business real property owned in the personal name of the member rather than a company (otherwise the trustee would not be permitted to acquire the real estate).
The provisions of the duties legislation of each State or Territory differ, however where concessions or exemptions are available they generally require the transferor to continue to be the beneficial owner of the land (this relates to business real property as it is the only land which an SMSF may directly acquire from a member).
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 a 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 sale of 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 property is to be used solely for the purpose of providing a retirement benefit to the transferor. |
| Document-ation | 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 confirming 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, 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. |
| Document-ation | 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 |
No luck in QLD
| QLD | Transfer to a super fund |
|---|---|
| Duty payable | Ad valorem duty applies |
| Relevant
provisions |
No provision for exemption or concession from duty |
| General desc-
ription of legislation |
A transfer of dutiable property is a dutiable transaction. |
| Document-ation | 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 l |
| WA | Transfer to a super fund |
|---|---|
| Duty payable | $20 |
| Relevant provisions | Sections 122 – 124 WA Duties Act 2008 |
| General description of Legislation | Nominal duty is charged on a transfer of dutiable property by a person to the trustee of a super fund where – |
| ▪ there is consideration for the transfer; and | |
| ▪ only the transferor can be a member of the super fund or the property is held in the superfund specifically for the transferor (ie property cannot be pooled with the assets of another member and no other members can obtain an interest in the property); and | |
| ▪ the property (or if sold, the proceeds) can only be held in the superannuation fund to be provided to the transferor as a retirement benefit. | |
| If the fund subsequently fails to satisfy any of the requirements (above) full stamp duty is payable in respect of any dutiable property still held. | |
| Nominal duty is charged under section 124 in respect of a transfer of dutiable property to the trustee of an SMSF that is an employer sponsored fund where – | |
| there is no consideration for the transfer. | |
| Document- ation | Application form is required – ‘Superannuation Fund Transactions – Application for Nominal Duty’. |
| Legislation | Duties Act 2008 (WA) Also refer to Duties Fact Sheet – Superannuation Transactions |
| Legislation website | http://www.austlii.edu.au/au/legis/wa/consol_act/da200893/ |
| Office | Office of State Revenue |
| Website | http://www.finance.wa.gov.au/cms/section.aspx?id=209 |
| ACT | 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 | Duty is charged on a transfer of dutiable property. |
| Document-ation | Lodgement form and documents are required. |
| Legislation | Duties Act 1999 (ACT) |
| Legislation website | http://www.austlii.edu.au/au/legis/act/consol_act/da199993/ |
| Office | ACT Revenue Office |
| Website | http://www.revenue.act.gov.au |
| SA | 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 property to a person who takes as trustee is deemed to be conveyance whether or not any consideration is given (except in certain circumstances regarding the transfer of family farming properties) |
| Document-ation | Lodgement form and documents are required |
| Legislation | Stamp Duties Act 1923 (SA) |
| Legislation website | http://www.austlii.edu.au/au/legis/sa/consol_act/sda1923157/ |
| Office | Revenue SA |
| Website | http://www.revenuesa.sa.gov.au |
| NT | 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 conveyance of dutiable property is a dutiable instrument. |
| Document-ation | Lodgement form and documents are required |
| Legislation | Stamp Duty Act (NT) |
| Legislation website | http://www.austlii.edu.au/au/legis/nt/consol_act/sda151/ |
| Office | Territory Revenue Office |
| Website | http://www.treasury.nt.gov.au |
| TAS | Transfer to a super fund |
|---|---|
| Duty payable | $50 |
| Relevant provisions | Section 49 Duties Act 2001 (TAS) |
| General description of legislation | Where the duties office is satisfied there is no change in the beneficial ownership of the property duty chargeable on the transfer is $50. Also an exemption is available in certain circumstances regarding the transfer of primary production land. |
| Document-ation | For primary production see ‘Documentary Evidence requirements Guideline’, for other transfers duties office reviews each transfer on its own facts recommend seeking confirmation of eligibility prior to lodgement. |
| Legislation | Duties Act 2001 (TAS) |
| Legislation website | http://www.austlii.edu.au/au/legis/tas/consol_act/da200193/ |
| Office | State Revenue Office |
| Website | http://www.sro.tas.gov.au |
Moving Property to an SMSF is not something to be done lightly without looking at the pros and cons as well as the procedures in your state or territory.
We have design a 3 part guide to buying a property in an SMSF
- Property through super in a SMSF – Part 1: Background
- Property through super in a SMSF – Part 2: The Process
- Property through super in a SMSF – Part 3: 20 most common mistakes
Even more information and complimentary strategy ideas are available on our Property in a SMSF page. Contact Caroline for specific legal advice on your proposed strategy.
IMPORTANT
This information is current as at the date of publication but may be subject to change. This article is general in nature and has been prepared without taking into account a potential your objectives, financial situation or needs. Before making a recommendation based on this article, seek personal legal and tax advice and consider its appropriateness based on the your objectives, financial situation and needs.
Are you looking for an advisor that will keep you up to date and provide guidance and tips like in this blog? Then why now contact me at our Castle Hill or Windsor office in Northwest Sydney to arrange a one on one consultation. Just click the Schedule Now button up on the left to find the appointment options.
Liam Shorte B.Bus SSA™ AFP
Financial Planner & SMSF Specialist Advisor™
Tel: 02 98941844, Mobile: 0413 936 299
PO Box 6002 BHBC, Baulkham Hills NSW 2153
5/15 Terminus St. Castle Hill NSW 2154
Corporate Authorised Representative of Viridian Select Pty Ltd ABN 41 621 447 345, AFSL 51572
This information has been prepared without taking account of your objectives, financial situation or needs. Because of this you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation and needs. This website provides an overview or summary only and it should not be considered a comprehensive statement on any matter or relied upon as such.
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Gary Turner
/ September 24, 2020Hi Vincent
I have two SMSFs and after the death of my sister, I am the sole director and sole member of both. Both funds are 100% in pension phase and both are 100% tax free. Each fund has a unique corporate trustee.
I wish to transfer a Qld residential property (duplex) from one SMSF to the other and then close the former SMSF thus simplifying affairs to one SMSF.
Is there any issue in transferring residential property in-specie between SMSFs in pension phase?
Is there any stamp duty concession for transfers between SMSFs in Qld where the trustee is different but the individual beneficiary is the same?
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SMSF Coach - Liam Shorte
/ September 24, 2020Hi Gary, you should get specific SMSF Legal Advice from a firm in Queensland as this is a complex issue. In general, the QLD Duties Act does seem to give a concessional for merging funds. Please read this link https://www.qld.gov.au/housing/buying-owning-home/advice-buying-home/transfer-duty/how-much-you-will-pay/concessions-on-transfer-duty/superannuation-concession . I would recommend you use an SMSF Specialist Lawyer like Cooper Grace Ward, Merthyr Law or Holding Redlich . You can find their specific details via the SMSF Association’s Find a Specialist Function here https://www.smsfassociation.com/find-a-specialist Look for an SMSF Specialist Adviser – Subcategory: Lawyer and search location or I would probably look at up to 30K’s from Brisbane for the expertise you need.
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Johnsmsf
/ January 6, 2020Very helpful article. I’m in Victoria and would like to purchase commercial property held solely in my name through our smsf of which myself and my wife are only directors and beneficiaries. Would section 41 stamp duty concession apply in this case given it is a sale at market value not just a transfer if it can be made clear the asset will be allocated entirely to me within the smsf and there is no change in beneficial ownership? It is the monetary consideration part that I am not sure of, if someone can kindly clarify
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SMSF Coach - Liam Shorte
/ January 6, 2020Yes I believe you can but I would recommend you contact SMSF specialist lawyers in Victoria like DBA Lawyers to get expert legal guidance. They can also provide all the paperwork required. https://www.dbalawyers.com.au/
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SMSF Coach - Liam Shorte
/ January 13, 2020I would recommend you contact SMSF specialist lawyers in Victoria like DBA Lawyers
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Kenneth Ang
/ January 23, 2018Great for Vic based SMSFs but great also for SMSFs in other states which buy Victorian properties.
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Kenneth Ang
/ January 23, 2018Hi Liam,
I just read the article. I’m a lawyer in Melbourne and have done a few of these transfers myself, from the individual to his smsf, for Victorian properties, without incurring stamp duty. They are known as in-specie transfer using non-concessional contribution or the CGT cap. They have to be business real property and there must be no consideration. Also the ‘evidentiary requirements’ on the SRO website have to be provided. There are also other conditions which have to be satisfied. I can also do transfers from a discretionary trust to a beneficiary. Again certain conditions have to be met. Usually this is the first step when the property is in the trust and the client wants to transfer it to their smsf. I’ve written articles on this topic in the SMSF Adviser magazine. If any of your clients or readers need help with this, I’m happy to assist.
Kind regards,
Kenneth Ang
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SMSF Coach - Liam Shorte
/ January 23, 2018Hi Kenneth, yes Victoria does seem to be the most flexible which is great for Vic based SMSFs
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PND Accountants (@patelanddalal)
/ May 10, 2017It has been great for me to read such great information about blogging since I am still a newbie to blogging.
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Kenneth Siah
/ August 3, 2016Dear Coach, How about transfer in the other direction? Kenneth 0403 256765
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SMSF Coach - Liam Shorte
/ August 4, 2016Hi Kenneth
Again it depends on your state. NSW and SA buyer will probably have to pay Stamp duty but Victoria probably not. Ask your lawyer to explore all options and worth calling the Duties office yourself.
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Vincent Walasek
/ June 24, 2016I understand that Stamp Duties are payable on the transfer of personally owned property into ones SMSF but what happens when you reach the age of retirement and want to cash out. Is Stamp Duty payable on the transfer of the property out of the SMSF? Based in SA and soon to retire.
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SMSF Coach - Liam Shorte
/ June 24, 2016Hi Vincent
This is not a site for specific personal advice so you should contact a solicitor in South Australia. However in general I do not believe there is an exemption on Stamp Duty when moving a property from an SMSF to the individual in SA. If you sell the property in the fund and pay the cash out then that will be tax free if in pension phase. If however you are moving the actual property out as a lump sum withdrawal then you will most likely be up for full stamp duty in your personal capacity as buyer. I would strongly recommend personal advice from professionals in your state.
Hope this helps.
Liam
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