SMSF Bare Trust & Custodian Setup
The trust structure your SMSF needs to borrow — set up right the first time.
- Correctly established bare trusts (holding trusts) for SMSF commercial and business-property borrowing.
- Stand-alone corporate custodian set up to hold the property.
- Right entity on the contract, signed in the right order for your state.
- Residential handled for existing / grandfathered LRBAs and pre-deadline purchases.
- Fixed-fee pricing — no surprises, no hourly billing.
- Experience across NSW, VIC, QLD and WA.
Why your SMSF needs a bare trust
A borrowing SMSF cannot hold the property directly
When your Self-Managed Super Fund borrows to buy property under a Limited Recourse Borrowing Arrangement (LRBA), the law does not allow the fund to hold the property in its own name while the loan is on foot. Instead, the property must be held by a separate trust — the bare trust (also called a holding trust or custody trust) — with a custodian trustee holding legal title on the fund’s behalf until the loan is repaid.
This is not a formality. The bare trust is the structure your lender relies on, the structure the ATO expects, and the structure that protects the “limited recourse” nature of the loan. If it is set up incorrectly — the wrong custodian, the wrong name on the contract, or the documents signed in the wrong order — the consequences are expensive: double stamp duty, a compliance breach, or a deal that has to be unwound.
At Corporate Legal, we establish your bare trust and corporate custodian correctly, in the right sequence for your state, and make sure the contract is exchanged in exactly the right name — working hand-in-hand with your accountant, financial adviser and mortgage broker.
Please note: Corporate Legal provides legal and conveyancing services only. We do not provide financial, taxation, superannuation or investment advice. Whether an SMSF purchase and borrowing arrangement suits you is a decision for your licensed financial adviser or accountant.
The building blocks
What a bare trust is, and why it has to be right
The Bare Trust (Holding Trust)
A simple trust that holds the property while your SMSF pays off the loan. The fund is the beneficial owner the entire time — the bare trust simply holds legal title until the debt is cleared.
The Corporate Custodian
The trustee of the bare trust. We recommend a stand-alone company set up purely for this role, keeping the property cleanly separated from the fund’s other assets and the members’ personal assets.
The Right Purchasing Entity
The contract’s front page must name the holding trustee in exactly the right way for your state. Getting this wrong is the single most expensive SMSF mistake — it can mean paying stamp duty twice.
Correct Execution Order
The order in which the contract, bare trust deed and loan documents are signed differs by state. Sign them out of order and you can invalidate the structure or trigger double duty. We control the sequence.
Deed Stamping (Where Required)
Some states require the bare trust deed to be stamped and lodged. We attend to stamping and revenue-office requirements so nothing holds up your exchange or settlement.
Lender & LRBA Alignment
Your lender will have specific requirements for the trust and custodian before it releases funds. We make sure the bare trust, the LRBA and the security all line up with what the lender and the ATO expect.
We set up both
Commercial and residential SMSF borrowing
Commercial Property in Your SMSF
Commercial and business real property borrowing is unaffected by the 2026 changes and is now the primary path for SMSFs that want to gear. Unlike residential, your fund can lease business real property back to your own business at arm’s length — so the rent builds your super. These deals add layers: GST, related-party leasing and going-concern considerations, all of which we account for when we build the trust.
- Bare trust and custodian set up for business real property.
- Structure compatible with arm’s-length related-party leasing.
- GST / going-concern contract structuring (with your accountant).
- Due diligence on zoning, permitted use and existing tenancies.
Residential Property in Your SMSF
New residential borrowing is changing: from 10 August 2026 an SMSF can no longer enter a new LRBA for residential property. Until then, we can still set up your bare trust and custodian for a residential purchase — provided contracts are exchanged before the deadline. We also act for existing, grandfathered residential LRBAs, including refinancing. And if your fund is buying residential outright with cash, no borrowing means no bare trust is needed.
- Pre-deadline purchases — contracts exchanged before 10 August 2026.
- Existing, grandfathered residential LRBAs, including refinancing.
- Correct purchasing entity on the contract for your state.
- Sequencing aligned with the “sole purpose” and related-party rules.
Multi-state
State-by-state: sequencing & stamping
The single biggest risk in setting up a bare trust is getting the timing and stamping wrong — and the rules are not the same in every state. Sign the holding trust deed at the wrong moment relative to the contract and you can trigger duty twice on the same property. We apply the correct framework for each state:
| State | Signing order (deed vs contract) | Holding-trust deed duty / stamping |
|---|---|---|
| NSW | The holding trust deed must not be signed before the contract — doing so can trigger double duty. We date the deed correctly relative to exchange. | A declaration of trust by the custodian attracts fixed duty ($750 since 1 Feb 2024) and is stamped with Revenue NSW. |
| VIC | The bare trust deed is dated after exchange and before completion. | No duty on the trust instrument, but a copy of the deed is lodged with the State Revenue Office. |
| QLD | Queensland takes the opposite approach to NSW on order of signing — we confirm and apply the correct sequence. | Holding trust deeds are not required to be stamped. |
| WA | The contract and holding trust deed can generally be signed in either order (we usually exchange first). | We confirm and attend to any RevenueWA requirements applicable to your matter. |
Duty rates, thresholds and revenue-office practice change over time and the exact treatment depends on your circumstances and current legislation. From 10 August 2026, the residential position applies only to grandfathered arrangements or contracts exchanged before that date; the commercial position continues to apply to new business-property purchases. Any duty or tax outcome should also be discussed with your accountant.
How it works
How our bare trust setup works
Strategy Consultation
Book your free 15-minute consultation. We confirm your fund’s structure, the property type, and how we’ll coordinate with your accountant, adviser and broker — and explain our fixed fee clearly.
Incorporate the Custodian
Before you commit to a property, we establish the corporate custodian (the bare trustee), so the right entity exists and is ready to be named on the contract.
Confirm the Buying Entity
We make sure the contract’s front page names the holding trustee correctly for your state — the step that protects you from double stamp duty.
Prepare & Execute the Bare Trust
We draft the bare trust (holding trust) deed and oversee execution in the correct order relative to exchange, aligning it with your lender’s LRBA requirements.
Stamping & Lender Hand-Off
We attend to deed stamping and revenue-office lodgement where required, then hand the lender a clean, compliant structure ready for settlement.
Ready to start?
Book your free 15-minute consultation and we’ll map out your fund’s setup.
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Why Corporate Legal
Why choose us for your SMSF structure
SMSF Specialists
Bare trusts, custodians, LRBAs and execution sequencing — handled by lawyers who do this regularly, not as a one-off.
A Lawyer, Not Just a Conveyancer
Your structure is built by a qualified property lawyer, giving you legal protection and strategic advice.
Double-Duty Protection
We confirm the correct entity and signing order before you exchange — the cheapest insurance against the most expensive SMSF mistake.
Fixed-Fee Pricing
A clear, upfront fee so you can budget with confidence — no billing surprises.
Coordinated With Your Team
We work hand-in-hand with your accountant, adviser and broker to keep every document moving in the right order.
Multi-State Experience
NSW, VIC, QLD and WA, each handled under the correct state framework.
Part of a complete SMSF service
One firm for the whole SMSF property journey
Setting up the bare trust is one step. If you’d like us to handle the whole SMSF purchase — contract review, searches and settlement — our SMSF conveyancing team can. And when your loan is eventually repaid, our Bare Trust to SMSF Transfer service moves the property out of the custodian and into your fund, concessionally.
FAQs
Bare trust & SMSF borrowing — your questions
Can my SMSF still borrow to buy residential property?
What is a bare trust and why does my SMSF need one?
What is the difference between a bare trust and a custodian?
Does the custodian have to be a company?
Why can signing in the wrong order cost me double stamp duty?
Do you set up bare trusts in every state?
Do you provide financial or tax advice on SMSFs?
How much does it cost to set up a bare trust?
Set your SMSF up to borrow, the right way
For commercial and business real property this remains fully available; for residential, you’ll need to act before the 10 August 2026 deadline or rely on an existing, grandfathered arrangement. Corporate Legal establishes your bare trust and custodian properly, in the right order for your state.
Book a Consultation