Ask Paul: Can we transfer property out of an SMSF and not pay stamp duty?

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Q. My husband and I set up a self-managed super fund about six years ago, for the purpose of investing in residential property.

We have five properties in our SMSF. I retired recently and my husband is due to retire in September.

We would like to take one of the properties out of our SMSF (once my husband retires), so we can use it for ourselves.

ask paul clitheroe stamp duty property smsf

The problem is that the property is in the name of our SMSF and we want to transfer it into our names.

Is there a way this can be done without having to pay stamp duty again on a house that we (the two-member SMSF) have already paid when our SMSF bought the property? - Karen

A. I am getting a lot of questions about residential property in super funds, most relating to the falling market, so yours is an interesting one, Karen.

There is a lot of complexity in an SMSF and even more with holding property in the fund.

You can sell or transfer a property to any party, including yourselves, that is not "arm's length".

As you know, this does not apply when an SMSF buys a property. So you'll need to get it valued, but it is a transfer and I do believe you will pay stamp duty.

Your question is, on the face of it, really simple.

But the technical nature of an SMSF makes it a real minefield, so it is really important that you go to your SMSF adviser, probably your accountant, and get professional, detailed advice.

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Paul Clitheroe AM is founder and editorial adviser of Money magazine. He is one of Australia's leading financial voices, responsible for bringing financial insight to Australians through personal finance books, the Money TV show, and this publication, which he established in 1999. Paul is the chair of the Australian Government Financial Literacy Board and is chairman of InvestSMART Financial Services. He is the chair of Financial Literacy at Macquarie University where he is also a Professor with the School of Business and Economics. Click here to email Paul your money question. Unfortunately Paul cannot respond to questions posted in the comments section. Please view our disclaimer here.
Comments
Bernadette Homer
April 26, 2021 3.12pm

Hi, My husband and I are retiring in September and will be moving back to the UK. We have a property in our SMSF that we would like to sell. Can we sell the property once we retire without paying CGT?

Michael Te kawau
September 28, 2021 4.28pm

Hi we have an 5 year old SMSF that has 2 property's. That is not working, any suggestions on what to do. Don't have an accountant or SMFS specialist. Alot of unexpected expenses we didn't know about when it was setup.