The rules around self-managed super funds are complex, to say the least.
Navigating these correctly when you’re buying or selling property is critical, otherwise you could be in line for some serious consequences.
- Double stamp duty penalties
- Fines up to $12,600
- Civil and criminal penalties, including potential jail time
- Loss of tax benefits
As you don’t want to get on the wrong side of the law, it’s essential to get the right legal advice to ensure your property transaction is compliant. That’s why you need to appoint an experienced SMSF conveyancer that’s up to the task
But how do you find out if they are?
Ask them these four questions first:
1. How much experience do you have with SMSF transactions?
Buying or selling an investment property through a SMSF is very different from a standard real estate transaction. Your conveyancer doesn’t just need to be well-versed in Victoria’s property laws but also have a thorough understanding of the strict SMSF regulations.
Take something as ‘simple’ as the name on the ownership deeds.
If your SMSF is borrowing money to buy the property, you need to set up a bare trust first to apply for a home loan under a limited-recourse borrowing agreement (LRBA). But in Victoria, the Land Titles office doesn’t recognise trusts – so the bare trustee must sign the contract as the legal purchaser. The bare trust deed must then be lodged with the State Revenue Office for stamp duty assessment.
Get this process wrong by preparing the paperwork incorrectly or filing it at the wrong time and you risk non-compliance.
2. When was the last time you handled a SMSF property transaction?
The rules and regulations governing SMSFs change regularly. Your best defence against getting caught out is by appointing a conveyancer who frequently handles SMSF transactions. This means they should be up-to-date with the latest changes and can give you accurate advice that helps you avoid any legal complications.
3. How will you communicate with me and how often?
SMSF property transactions are often complicated affairs, so your conveyancer should be proactive, responsive and available whenever you need them. They should set out a clear timeline, inform you of any critical dates in the process and explain everything in clear, easy-to-understand language without slipping into legal jargon.
4. How much do your conveyancing services cost?
Conveyancers in Victoria need to comply with cost disclosure requirements. These state that written quotes must be given before or at the time a conveyancer is retained by a client. However, conveyancers can charge for their services in different ways. And one of the best ways of avoiding nasty surprises down the line is by choosing a firm with fixed fees.
Rhiannon Leonard is a conveyancing lawyer at Sutton Laurence King Lawyers.
Buying an SMSF property is complicated and time-consuming. So make sure you have an expert Victorian SMSF conveyancer on your side. Contact Rhiannon on 03 9070 9810 or email@example.com to begin the process.