Article written by Sarah Davie
Associate Director & Licensed SMSF Accountant
In Buying Business Property in Your SMSF, we looked at why so many business owners are turning to their SMSF to buy the property their business operates from, instead of paying rent to someone else. If you missed it, the short version is this: your fund can own your commercial premises, charge your business market rent and let that rent build your retirement savings rather than someone else’s.
That’s the headline benefit. But buying your business premises through an SMSF is only the beginning. Once business owners get their head around it, three practical questions tend to follow…
What if I already own the property? Can I do this with someone other than family? What happens if my business partner retires or dies?
Here’s how each one plays out.
Can You Transfer Business Property You Already Own Into Your SMSF?
Generally speaking, an SMSF cannot buy an asset from a member or a related party. That’s one of the fundamental protections in the super rules. It stops your fund being used to prop up your personal finances, or to take assets off your hands at an inflated price.
Business real property is one of the few exceptions to that rule.
If you already personally own the building your business operates from, you may be able to sell it into your SMSF, provided the property meets the business real property definition, the sale happens at genuine market value and everything is properly documented.
It’s a significant exemption. The strategy isn’t limited to buying a brand-new property with cash sitting in super – it can apply just as well to a property you’ve owned for years.
Why would you do this? A few reasons we see regularly:
- Freeing up capital - Selling the property to your fund releases equity that's currently tied up, which can then be used elsewhere in the business or personally.
- Asset protection - Once the property sits inside super, it generally sits outside the reach of creditors if your business runs into trouble, separate from your other personal and business assets.
- Simplifying your affairs - Rather than owning the property personally and dealing with it in your own tax return, it becomes a fund asset taxed under super's rules.
There are real costs to consider when transferring the business premises. Will stamp duty apply? Will capital gains tax need to be paid? Does the SMSF have sufficient liquidity to complete the transfer?
It isn’t a decision to make on a back-of-envelope basis, but for the right business owner, it can be one of the more powerful moves available.
What Happens If a Business Partner Retires, Sells Up or Dies?
This is where a lot of business owners pause. If your SMSF owns your business premises and a partner retires, sells their share of the business or dies, what happens to the property?
The property itself doesn’t go anywhere. It stays a fund asset and keeps earning rent from whoever’s running the business, provided the lease stays on arm’s length terms. What needs attention is control of the fund itself and that’s where a bit of forward planning goes a long way.
A few things are worth thinking through before you find yourself dealing with them under pressure:
- Your trust deed and any partnership or shareholder agreement should set out what happens to a member's balance in the SMSF and their share of jointly held property, when they exit the business.
- Binding death benefit nominations should be current and reflect what you actually want to happen, particularly where a property is one of the fund's main assets and can't simply be split three ways overnight.
- If a departing member needs to be paid out of the fund, the trustees need to consider whether the fund has enough cash, or whether the property may need to be sold or refinanced to release their benefit.
Insurance should also form part of that planning. Where a significant portion of the fund is tied up in property, appropriate insurance may provide valuable liquidity if a member dies or becomes permanently disabled. Rather than leaving the remaining members to find cash at short notice, it can help create more options for meeting benefit obligations without immediately having to sell or refinance the property.
None of this is a reason to avoid the strategy, it’s a reason to set it up properly from the start, with succession built into the plan rather than bolted on later.
Can Business Partners Buy Property Through an SMSF Together?
A common assumption is that an SMSF is purely a family affair – mum, dad and the kids.
While SMSFs can now have up to six members, those members do not necessarily need to be related. However, an important restriction applies where there is an employment relationship: generally, an employee cannot be a member of the same SMSF as their employer unless they are relatives.
For business owners, that opens up a useful option: business partners or co-directors can set up an SMSF together and pool their super specifically to buy the premises they operate from.
Picture two unrelated partners who each have a reasonable super balance, but not enough individually to buy the building outright. Combined – and with some borrowing on top, if needed – the purchase becomes achievable in a way it wouldn’t be for either of them alone.
With more members and clearer documentation from day one about how contributions, ownership and eventual exits will work, the fund is far better placed to handle a change in the business down the track.
Can an SMSF Still Borrow to Buy Commercial Property?
If your fund doesn’t have enough cash to buy the property outright, a limited recourse borrowing arrangement (LRBA) allows your SMSF to borrow to complete the purchase, with the loan secured only against that one property.
It’s worth flagging a change that came into effect from 10 August 2026: SMSFs can no longer use a new LRBA to acquire residential property. Borrowing to acquire business real property, however, remains fully permitted.
In practice, that makes buying your own commercial premises through your SMSF one of the few property-borrowing strategies still fully available to funds, and arguably more relevant now than before the change.
Getting the Structure Right
The related-party exemption, succession planning, multi-member funds, borrowing: all of it needs to work together, and all of it needs to be documented properly.
Get it wrong and you risk the fund breaching the sole purpose test or the in-house asset rules, which can be costly to unwind.
This is exactly why we recommend working with an accountant who specialises in SMSFs, rather than treating this as a DIY project.
Between the compliance requirements, the tax considerations and the succession planning, there’s a lot riding on getting the detail right the first time.
Common Questions About SMSFs and Business Property
Can my SMSF buy the property my business already leases from someone else?
Yes. Your SMSF can purchase business real property from an unrelated third party in the same way it would buy any other asset, using fund cash and, where needed, a limited recourse borrowing arrangement.
Can I sell a commercial property I personally own into my SMSF?
Yes, provided it meets the business real property definition, is sold at genuine market value and the transaction is properly documented. This is one of the few exceptions to the rule that stops an SMSF acquiring assets from a related party.
What happens to the property if a business partner in the SMSF retires or dies?
The property stays an asset of the fund and keeps earning rent. What changes is how that member’s balance and their share of the property are dealt with, which should already be set out in your trust deed, partnership agreement and binding death benefit nomination.
How many people can be members of an SMSF that owns business property together?
Up to six.
Is SMSF borrowing for commercial property still allowed after the 2026 changes?
Yes. From 10 August 2026, SMSFs can no longer use a new limited recourse borrowing arrangement to buy residential property, but borrowing to acquire business real property remains fully permitted.
Thinking About Buying Your Business Premises Through Your SMSF?
If you’re weighing up whether to buy your business premises through your SMSF or whether an existing property you own could be moved into your fund. Get in touch.
We’re happy to talk through whether the strategy stacks up for your situation.
Still got questions?
Our highly experienced and local SMSF team can walk you through the process and help you understand
whether a SMSF loan for property is a viable option for you.
Book a Free SMSF Strategy Session with Rogerson Kenny’s SMSF specialists today.
*Disclaimer: This article is general information only and does not take into account your personal circumstances. Always seek professional advice before making financial decisions.*
Sarah Davie is an Associate Director and Licensed SMSF Accountant at Rogerson Kenny Business Accountants. She specialises in Self-Managed Super Funds and advises trustees on compliance, strategy and superannuation legislation.
