When it comes to acquiring a property within your SMSF using a limited recourse borrowing arrangement (LRBA), you need to understand the timing requirements that apply to each state when determining whether the holding/bare trust deed needs to be signed and dated before or after entering into the contract of purchase. Where incorrectly incompleted, the fund trustee could end up paying stamp duty multiple times.
The following below provides a summary of each state and the timing requirements for signing and dating the holding/bare trust deed and signing the purchase contract:
- NSW, TAS, ACT – the purchase contract must be signed and dated before the holding trust deed.
- SA, QLD, NT – the holding trust deed must be signed before the purchase contract.
- VIC, WA – you can sign the purchase contract and holding trust deed in any order
Victoria is currently the only state that will allow for the contract to include an ‘and/or nominee…’ clause. Other states will likely result in ad valorem duty being charged when adding the holding/bare trustee as an alternate purchaser.