It is important for the validity of an SMSF LRBA for clients to execute (sign and date) their bare trust at the correct time. So when to date a bare trust deed for an SMSF borrowing?
You can set up your bare trust online here: Bare Trust.
When to date a bare trust deed?
The applicable date for a bare trust deed varies State by State.
The following table illustrates when the bare trust deed should be executed and the applicable duty to be paid (Source).
- QLD – Before or on contract date
- NSW – After contract date
- ACT – After contract date
- VIC – After contract date but before settlement
- TAS – After contract date
- SA – After contract date but before settlement
- WA – Before or on contract date
- NT – Before contract date
LRBA Frequently Asked Questions
The following article answers some common questions when it comes to buying property with super: Buying property with super – common questions
Questions include:
- What name should be on the property purchase contract for an LRBA?
- Does a company need to be used as trustee of a holding trust / bare trust for an SMSF borrowing?
- Can an SMSF buy a land and build a house / develop a property?
- How long does it take to set up an SMSF and LRBA structure?
- How much can can SMSF borrow?
- How much does it cost to set up an SMSF to buy property?
- Can I use my super to buy a house?
Limited recourse borrowing refresher
For those who have not yet jumped into the waters, an LRBA for a real estate purchase is when:
- the SMSF trustee borrows from a lender to buy property (in the event of default the rights of the lender must be limited to the property purchased),
- the SMSF trustee has an agreement with a holding trustee that the holding trustee will hold the property for the super fund (i.e. the bare trust deed covers the relationships), and
- the holding trustee enters into a contract and buys property from the vendor using money from the SMSF trustee.
Queensland and the NT are the odd ones out when it comes to when to date a bare trust deed. In QLD and the NT the bare trust deed is dated before the contracts are entered into, however in practice they can be signed on the same day.
12 comments
Amanda Chong
March 3, 2023 at 4:37 pm
Hi hi
I am in QLD and SMSF has been set up. As per your article. You mentioned that we need to execute the trust before enter contract in QLD.
Can I set up Bare Trust and Corporate Trust today and don’t execute the trust till I enter into a contract?
This mean I also don’t put any property address or title on Bare Trust Deed..
Then two weeks later, on Monday night 10pm the buyer accept my offer and we sign a contract.
What I understand is once we execute the bare trust we cannot change the deed details.
If I execute the bare trust on Monday (before or on the day sign contract). On the same day I sign the contract.
Can I request the solicitor to add the property details on Bare Trust deed on Tuesday(neXt day)? Will this be considered that we cannot change the Bare Trust after I executed on Monday?
I actually confused when to execute the bare trust? When to add property details on Bare Trust?
Appreciate if you could reply
Kris Kitto
March 6, 2023 at 9:29 am
Yes – it is tricky.
The bare trustee company needs to be registered before you enter any contract.
A trust is a relationship (between the trustee and beneficiaries) and it requires an asset (e.g. property). So the bare trust is created when you sign a contract in the name of the bare trustee company (on behalf of the SMSF as the beneficiary).
The bare trust deed document records the relationship between the parties.
The process we use with Grow SMSF clients for QLD properties is as follows:
1). We set up the bare trustee company (holding trustee) – this name goes on the contract –MORE INFO;
2). Once an offer has been accepted (but before the contract is signed) you send the contract to Grow;
3). Grow organises the bare trust deed (with details of the property);
4). You sign the bare trust deed;
5). You sign the contract;
Please do not overthink everything.
Simply ensure the date of execution of the bare trust deed is either BEFORE or the SAME DAY as the date on the contract.
Amanda
March 3, 2023 at 4:38 pm
I am in QLD and SMSF has been set up. As per your article. You mentioned that we need to execute the trust before entering a contract in QLD.
Can I set up Bare Trust and Corporate Trust today and don’t execute the trust till I enter into a contract?
This means I also don’t put any property address or title on Bare Trust Deed.
Then two weeks later, on Monday night at 10 pm, the buyer accepted my offer and we sign a contract.
What I understand is once we execute the bare trust we cannot change the deed details.
If I execute the bare trust on Monday (before or on the day sign contract). On the same day, I sign the contract.
Can I request the solicitor to add the property details on the Bare Trust deed on Tuesday(next day)? Will this be considered that we cannot change the Bare Trust after I executed it on Monday?
I actually confused about when to execute the bare trust. When to add property details on Bare Trust? Can I set up Bare Trust earlier before entering into a contract?
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Kris Kitto
April 13, 2023 at 10:14 am
VIC SRO has provided updated guidance (December 2022) regarding SMSF holdings trust (bare trusts): https://www.sro.vic.gov.au/limited-recourse-borrowing-arrangements-custodian-trusts-and-holding-trusts
Although previous guidance recommended executing the bare trust deed AFTER settlement had occurred, from a practical perspective, most lenders will require a signed and dated bare trust deed to be provided before the loan is approved and settlement occurs.
Aaron
July 10, 2023 at 6:42 pm
Hi,
Why does a bare trust deed need to be dated after the date of the contract in NSW? Does that not open up a potential double transfer duty scenario as a purported sub-sale?
Kris Kitto
July 11, 2023 at 9:08 am
Seek you own legal advice, but the following article explains the technicalities:
https://brazelmoorelawyers.com.au/avoiding-double-stamp-duty-on-a-declaration-of-bare-trust-for-a-smsf-purchase-of-property/
Thor
July 31, 2024 at 2:26 pm
Hi,
Is the date to sign based on where the Trust is or where the property is located? If the bare Trust and Trustee company are in NSW and purchasing a QLD property, which one applies?
Kris Kitto
July 31, 2024 at 2:32 pm
Based on where the property is physically located.
In your example, QLD.
Interstate purchases can be tricky as different states have different rules. You must comply with the rules of the state the property is located otherwise potentially be faced with finance falling over, contract not completing, or be required to do another transfer and pay double-stamp duty!
Thor
July 31, 2024 at 6:57 pm
Thanks for that. Much appreciated, Kris!
DJ
April 24, 2025 at 12:05 pm
Hi Kris,
In light of new revenue ruling as mentioned on the following lawyer’s website, what is your opinion about signing of bare trust before exchange of contract in NSW?
https://www.herbertsmithfreehills.com/notes/realestateaustralia/2023-01/nsw-stamp-duty-alert-acknowledgment-of-trust
We also confirmed with two other legal firms in NSW and both confirmed that in NSW bare trust can be executed before exchange of contract. Not sure if before or after both is fine.
Kris Kitto
May 8, 2025 at 11:28 am
OK, we are not lawyers, so you should always obtain and follow the guidance of your solicitors when it comes to SMSF property purchases.
Legal advice received by Grow recommends that bare trust deeds for NSW properties be executed after the contract.
Details below 👇
___________________________________
Based on the Revenue NSW Ruling DUT031v2 and relevant commentary, here’s how your current instruction and process align with stamp duty requirements for NSW property purchases via an SMSF bare trust:
## **1. Contract Signing as Trustee for the Trust**
You instruct clients to execute the contract in the name of the custodian as trustee for the bare trust (e.g., “ABC Property Investment Pty Ltd as trustee for ABC Property Bare Trust”). This is standard practice and, provided the bare trust deed is executed after the contract, the Revenue NSW ruling confirms this approach is acceptable and does not automatically trigger additional stamp duty,
**if the following conditions are met**:
– **The contract itself is not a declaration of trust.** If the contract merely describes the purchaser as trustee for a trust, and does not itself declare or create the trust, it is generally not considered a separate dutiable declaration or acknowledgment of trust at that stage. The duty is assessed on the contract as a contract for sale, not as a declaration of trust[2][3].
– **The bare trust deed is executed after the contract.** The subsequent execution of the bare trust deed (confirming the SMSF as beneficial owner) is the formal declaration of trust. This is liable to duty, but specific concessional rates apply if all criteria are met[2][6].
## **2. Stamp Duty on the Bare Trust Deed**
Under section 62B of the NSW Duties Act 1997, a **fixed duty of $750** (for deeds executed on or after 1 February 2024) applies to a declaration of trust by a custodian (bare trustee) for a self-managed superannuation fund, provided all criteria are satisfied. This includes:
– The property is acquired via a limited recourse borrowing arrangement;
– The SMSF was in existence at the time the custodian entered the contract;
– The SMSF is the actual/real purchaser;
– All required evidence is provided[6].
If these conditions are not met, the declaration of trust may be liable to ad valorem (value-based) duty instead of the fixed rate[6].
## **3. Key Points from the Revenue NSW Ruling and Commentary**
– **Contract wording:** If the contract merely describes the purchaser as trustee for a trust, and does not itself declare or create a trust, it is not itself a dutiable declaration or acknowledgment of trust. The duty is assessed on the contract as a contract for sale[2][3].
– **Subsequent deed:** The bare trust deed (executed after the contract) is a declaration of trust and is liable to duty, but at the concessional fixed rate if all criteria are met[6].
– **Evidence:** Documentary evidence must confirm the SMSF as the actual/real purchaser and source of funds[6].
## **4. References to Herbert Smith Freehills Article**
The HSF article confirms that Revenue NSW’s approach is now clarified: a contract describing the purchaser as trustee for a trust, without more, is not a dutiable declaration or acknowledgment of trust. Only if the contract itself declares or creates the trust (not just describes capacity) does it become liable as a declaration of trust[4].
## **Conclusion**
Grow’s current process-signing the contract as “custodian as trustee for trust” and executing the bare trust deed after-**does not trigger additional stamp duty on the contract as a declaration of trust**, provided the contract does not itself declare or create the trust. The bare trust deed is liable to a fixed duty if all criteria are met[2][6]. Always ensure documentary evidence confirms the SMSF as the actual purchaser and source of funds[6].
Citations:
[2] https://www.revenue.nsw.gov.au/help-centre/resources-library/rulings/duties/dut031-v2
[3] https://www.revenue.nsw.gov.au/help-centre/resources-library/rulings/duties/dut031-v2
[4] https://www.herbertsmithfreehills.com/notes/realestateaustralia/2023-01/nsw-stamp-duty-alert-acknowledgment-of-trust
[5] https://www.revenue.nsw.gov.au/help-centre/resources-library/forms/duty/gd005.pdf
[6] https://www.revenue.nsw.gov.au/property-professionals-resource-centre/duties-guides/declaration-of-trust-by-custodian/assessing-transfer-duty
[7] https://www.revenue.nsw.gov.au/news-media-releases/revenue-ruling-dut-031v2-declaration-of-trust-and-acknowledgement-of-trust
[8] https://www.herbertsmithfreehills.com/notes/taxaustralia/2025-posts/Duties-Alert-Commissioner%E2%80%99s-Practice-Note-confirms-Revenue-NSW%E2%80%99s-position-on-Options-to-Purchase-Land
[9] https://www.revenue.nsw.gov.au/about/legislation-and-rulings/revenue-rulings/rulings/duties/dut031
[10] https://legalconsolidated.com.au/stamp-duty-in-nsw-just-to-change-the-trustee/
[11] https://www.revenue.nsw.gov.au/about/legislation-and-rulings/revenue-rulings/rulings/duties/dut041v2
[12] https://www.bartier.com.au/insights/articles/beware-to-declare-nsw-stamp-duty-traps-on-acknowledgments
[13] https://www.revenue.nsw.gov.au/property-professionals-resource-centre/duties-guides/declaration-of-trust-by-custodian/assessing-transfer-duty
[14] https://www.herbertsmithfreehills.com/notes/realestateaustralia/2022-03/significant-stamp-duty-changes-affecting-property-transactions-in-nsw
[15] https://www.herbertsmithfreehills.com/notes/realestateaustralia/2022-05/significant-stamp-duty-changes-affecting-property-transactions
[16] https://www.mondaq.com/australia/trusts/1274780/beware-to-declare-nsw-stamp-duty-traps-on-acknowledgments-of-trust
[17] https://www.herbertsmithfreehills.com/notes/taxaustralia/2022-09/resettlement-series-resettlement-risks-beyond-the-trust-deed
[18] https://www.herbertsmithfreehills.com/notes/taxaustralia/2022-06/trust-resettlement-series-amending-the-trust-deed
[19] https://ca.practicallaw.thomsonreuters.com/w-038-2426?transitionType=Default&contextData=%28sc.Default%29