Buying commercial property through your self-managed superannuation fund (SMSF) can be a tax-effective way to grow your retirement savings. For many business owners, it also presents an opportunity to own their business premises within their super, paying rent directly to the fund instead of a landlord.
However, there are strict rules and compliance requirements that must be followed to avoid penalties and protect your investment.
Why Choose Commercial Property for Your SMSF?
Commercial property is often attractive for SMSFs because:
- Your business can lease the property from the SMSF at market rent
- Rental income is taxed at the concessional SMSF rate of 15% (and potentially less in pension phase)
- The property can form a stable, income-generating asset within your retirement portfolio
Key Compliance Rules
To remain compliant with the Superannuation Industry (Supervision) Act 1993 (SIS Act):
- The lease to your business must be at market rent and on commercial terms
- Rent must be paid on time, with arrears managed promptly
- The SMSF must hold a valid, written lease agreement with the tenant
- The investment must align with your SMSF’s written investment strategy
Benefits for Business Owners
Owning your business premises within your SMSF can:
- Provide certainty of tenure for your business
- Allow you to benefit from both capital growth and rental income
- Reduce reliance on external landlords and rent increases
Legal Support for SMSF Commercial Purchases
Our property lawyers can:
- Review and negotiate the purchase contract
- Ensure compliance with SMSF rules and the SIS Act
- Draft a compliant lease agreement between the SMSF and your business
- Coordinate with your accountant and financial adviser for a smooth transaction