Property development and SMSFs – Part 4: Taxation considerations

In the third instalment of the four part series on self managed superannuation fund trustees developing property, we discussed the limitations on fund trustees borrowing to develop property and the importance of properly documenting property development arrangements.

In this final instalment, we consider the commercial and taxation drivers of a land development project involving a self managed superannuation fund.

Acquisition of the development land

Stamp duty

Where an entity, being the fund trustee or the trustee for a unit trust, acquires vacant land, the purchase will generally be subject to stamp duty in the normal manner at the transfer duty rates.

If the development land is contributed to the fund as an in specie contribution (subject to ensuring the superannuation law is complied with and the in specie contribution does not give rise to an excess contributions tax liability), the in specie contribution of the development land will be exempt from