Great approach to real estate investing

LEADING NEWCASTLE LAWYERS: Damian Burgess (left) and James Thomson (right). Photo: SUPPLIED.

The creation of a self-managed superannuation fund (SMSF) has long been considered the preserve of the wealthy.

But if you have at least $300,000 in superannuation or are a couple with a super combined of at least $300,000, it’s worth considering, according to James Thomson, director and senior attorney at Burgess. Thomson.

“With today’s low interest rates and surging real estate market, it may be a good idea to put your super to work and invest directly in real estate,” James said. “An SMSF can be set up by individuals or couples allowing them to roll over their combined super balances into a single fund to invest in real estate.

“Once the funds are transferred to an SMSF bank account, they can be used as a deposit for the purchase of a property. It is also possible to borrow up to 80% to finance the purchase from a There are a number of lenders and there are specialist mortgage brokers for SMSF loans.

“Using an SMSF in this way allows you to use your superannuation to invest in property that can potentially provide a stream of income for your retirement and capital gains with the property held in a structure that offers many tax benefits.

Burgess Thomson are SMSF Real Estate Purchasing Legal Specialists and can assist you with this process and fulfill lender requirements for loan and bare trust establishment.

“There are strict legal requirements regarding the types of properties that can be purchased in an SMSF and the use of those properties,” James said. “The types of properties purchased must be commercial properties or residential properties purchased in arm’s length transactions.

“To borrow to fund your SMSF purchase, a simple trust must be set up to ensure that the borrowing is a limited recourse facility. This means that SMSF assets are protected in the event of default on the loan, as the only security for the loan is the property purchased, which is held in the name of the bare trust.However, most lenders require personal guarantees to be given for the loan.

The property is separated into a bare trust which acts as custodian for the purchase. Once the loan has been repaid, title can then be transferred to SMSF and, if done correctly, no additional transfer duty should be due on the subsequent transfer to SMSF.

“As this is a specialist area, it is important to seek expert legal advice before exchanging contracts as there may be transfer tax implications if not done correctly. , including the risk of double transfer taxes if the simple trust is dated prior to the exchange of contracts,” James said.

“An SMSF may purchase commercial property owned by an SMSF member personally,” he added. “This allows their company to then lease the property to SMSF.

“There are transfer rights concessions available for the transfer of commercial property owned by SMSF members personally into their SMSF under certain circumstances, provided that the property is held in the same proportions as SMSF members, a right reduced transfer fee of only $500 is payable.

“Burgess Thomson can help complete applications to Revenue NSW for these important concessions.”

Burgess Thomson has been one of Newcastle’s most reputable law firms since 1983 and is listed in the Legal 500 and Doyle’s Guide to top-ranked law firms.

  • Assignment, real estate law and leases

  • Wills, estate planning, estates of deceased persons and testamentary disputes

  • Business and commercial law and retirement pension

James has over 20 years of experience and completed the Negotiation Program at Harvard Law School. He holds a Master of Laws from the University of Sydney and a Bachelor of Laws and Bachelor of Commerce (Accounting) from the University of NSW.

He is a member of the Law Society of NSW, Newcastle Law Society, Australian Institute of Company Directors, Commercial Law Association, Society of Trust and Estate Practitioners and SMSF Association.

Damian Burgess founded Burgess Thomson in 1983 and has over 40 years of legal experience. His personal approach, dedication and attention to detail ensure him a loyal following of loyal customers.

Sue Cheal is a justice of the peace and has been with the firm for over 29 years. She supports a team of six highly trained paralegals with her meticulous attention to detail. Together they take the time to get to know their customers and provide regular updates during what can sometimes be a stressful time in their lives.

“We do all our settlements electronically using PEXA, which means clients receive funds from their sale the same day and properties are transferred into our clients’ names immediately upon settlement,” said said James. “We are also giving clients the option to download the PEXA Key app to their phone and use it to receive updates on the progress of their case.”

Burgess Thomson is located at 400 Hunter Street, Newcastle, directly opposite the New Courthouse, with parking available nearby. For more information call (02) 4929 5602, visit or email [email protected]