Structuring your property development within your SMSF

Assuming that all the regulatory requirements can be satisfied, it may be possible for your SMSF to be undertaking activities in a number of ways, including: As sole owner of the project, using SMSF funds By a limited recourse borrowing arrangement JV or as tenants in common By investing via

Property development in your SMSF – Yes or No?

From a tax perspective, your self-managed superannuation fund (SMSF) is a good place to make property development profits, provided you won’t need to access the money until retirement. The downside is that it also involves cutting a path through a jungle of complex tax and legal regulations, all at the

Development agreements vs Joint Venture?

A development agreement is a contractual arrangement between the builder and land owner for which there is a fee for the development of the land. This arrangement differs from a typical JV where the result is a sharing of the final product (the completed houses, units or apartments), as the

Alternative Joint Venture (JV) structures

Are there alternative joint venture (JV) structures? Indeed there are. What if you decided to use a company or unit trust as the JV vehicle? The key difference between the partnership JV and company or unit trust from a structuring point of view is the issue of losses. In a

A joint venture (JV) vs a partnership – Be careful

The benefits of an unincorporated JV include that there is no joint and several liability. In other words, each of the parties in the joint venture is responsible for their own tax consequences and one cannot impinge on the other. The real-life problems that arise if you have created an

What is a joint venture?

Property development arrangements have been on the ATO’s radar for a very long time and we are currently seeing audit activity looking at the GST treatment of joint venture (JV) arrangements. One of the problems with understanding JVs is that the term itself is used in a number of different

What is a special purpose vehicle (SPV)?

A special purpose vehicle (SPV) is a separate formal structure (either a company or a trust) that brings together separate parties, such as a developer and an investor, for the purpose of a property development. These property developments usually exist for a defined time period and are generally born from

Structuring your property development – what’s best for you?

If you are considering getting into property development, you could structure the development as a sole trader, partnership, company or trust. As with your main business, many developers will protect themselves by using a separate entity (a company or trust) for each development. However, the ownership of the land on

What happens when your property development changes?

The basic tax position for a property development is: A capital asset is something that you acquire with the intention of holding it and generating a return from Activities you undertake in respect to the property may amount to the carrying on of a business, or an isolated profit-making If

What is a profit-making transaction when it comes to property?

Unlike a mere realisation of an asset’s value, a profit-making transaction is one where an asset was purchased with the intent of selling it for profit. This transaction is considered revenue, rather than capital (even if it’s an isolated or one-off transaction), which means that the net profit from the