In the previous blog, we looked at the benefits of buying property through an SMSF. Now let’s explore how this strategy works in practice – and what to consider for the long term.
Mini-Stories: Real Business Owners Using SMSFs
- Dentist buying their practice rooms – Instead of paying $70,000 a year to an external landlord, the practice now pays rent into the dentist’s SMSF, taxed at just 15%.
- Trades business securing a warehouse – No more risk of being forced out mid-contract, plus the property’s value grows inside the SMSF.
- Professional services office – Rent payments build retirement wealth while providing stability for the business.
- Family-run retail store – Owning the shopfront gave them confidence to invest in fit-outs while the SMSF captured capital growth.
Succession: Thinking Beyond Today
We once worked with a family business where the parents bought their premises inside an SMSF. It gave them security and helped grow their super over many years.
When it came time to think about stepping back, their children wanted to run the business. The property could stay in the SMSF – the parents still enjoyed the superannuation benefits – but it raised discussions about the longer-term succession plan.
This is why we always ask clients early on: What is your exit strategy, and when might it happen? These answers often guide the best structure from the outset, and ensure that both business and retirement goals are aligned.
Did You Know? The SIS Act Exemption
The SIS Act contains an important exemption: an SMSF can acquire business real property from a member or related party, provided the transaction is at arm’s length.
This means if you already own your premises outside super – say, in your personal name or another structure – you may be able to sell it into your SMSF.
But beware: this only applies to business real property. Non-business property, such as residential investment property, cannot be transferred into an SMSF or purchased from a related party.
These strategies highlight the flexibility and power of SMSFs, but they also show why careful planning is essential. Next, we’ll explore the rules, risks, and what you need to know before committing.
Contact us to discuss how this strategy might apply to your own business.
Disclaimer: This article is general information only and does not take into account your personal circumstances. Always seek professional advice before making financial decisions.
