The name on a property title is not always the name of the fund that paid for it. Understanding how individual trustees, corporate trustees and bare trusts interact is one of the most useful things an SMSF trustee can do before signing a contract, because the structure shapes borrowing, record keeping and succession long after settlement.
The bare trust sits at the centre of every SMSF limited recourse borrowing arrangement, yet most trustees only vaguely understand what it does. Getting the documentation wrong can trigger a prohibited transaction and put your entire fund at risk.
The decision between buying property through your SMSF or in your personal name involves far more than tax rates. From bare trust requirements to borrowing restrictions, the legal structures differ so dramatically that choosing wrong can cost tens of thousands in unnecessary duty and penalties.