Can your SMSF buy your business?
At first glance, the SMSF would not be able to acquire the property from the member because they are a related party of the SMSF.
However, section 66 of the SIS Act does contain a relevant exception to the general prohibition on related party acquisition.
The exception allows the Fund to buy what is called ‘business real property’ provided it is transferred at market value.
Figuring out whether the property constitutes ‘business real property’ can be straightforward or a little more complex, depending on the type and use of the property, so it’s always best to speak to a professional before proceeding.
The Superannuation environment is the least taxed vehicle in the Australian tax system so having your business premises in your SMSF is a great way to save on tax and in some circumstances to pay no tax at all. Another great draw card is that there are stamp duty concessions on the transfer.
If you’re to transfer your business premises into your SMSF and need some guidance please feel free to call;
Cayle Petritsch
SMSF Specialist Advisor
T: 02 9984 7774
E: caylep@nac.com.au
Martin van der Saag
Director
T: 02 9984 7774
E: martinv@nac.com.au
“While it may seem that an SMSF cannot acquire property from a member, the Superannuation Industry (Supervision) Act includes an exception for business real property.”
About the author
Marius Fourie - Director & Business Advisor
As Director and Business Advisor, Marius uses his accounting expertise and empathetic skills to work directly with business owners and help them feel at ease with their finances.
Marius saw a common need in clients that just wasn’t being met by accounting providers.
That need was for clear, open communication and streamlined accounting services that didn’t come padded out with any unnecessary features.
Business owners just don’t have time to compare different accounting firms to see which one has the best packages with the best inclusions (many of which they would pay for but never use).
Key Takeaways
SMSFs Can Acquire Business Real Property
Under the Superannuation Industry (Supervision) Act’s exception, an SMSF can buy business premises from a member if it meets the business real property definition and is transferred at market value.
Market Value and Compliance Are Critical
All transactions with related parties must occur at genuine market value to satisfy compliance and avoid penalties.
Residential Property Is Not Eligible
Property used mainly for private residential purposes is not considered business real property and therefore cannot be transferred into an SMSF from a related party.
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Frequently Asked Questions
Can my SMSF buy my business?
Your SMSF can acquire business real property — such as commercial premises used in your business — under an exception in the SIS Act, provided it’s transferred at market value.
What counts as ‘business real property’?
Business real property generally refers to land and buildings used exclusively for business purposes. Whether a specific property qualifies can depend on its type and use.
Are there tax advantages to buying business property through an SMSF?
Yes. Commercial property owned by an SMSF may be taxed more favourably (e.g., concessional rates on rental income and potential stamp duty concessions on transfer).
Can an SMSF buy a residential property used by my business?
No — the related party exception generally only applies to business real property. Residential property can’t be acquired from members or related parties under current super rules.
Should I seek professional advice before transferring my business premises?
Yes. Determining whether property qualifies as business real property and meeting market value and compliance requirements can be complex, so expert advice is essential.
What’s the biggest compliance risk when my SMSF buys an asset connected to my business?”
The biggest risk is getting the classification wrong — determining whether an asset qualifies can be straightforward or complex depending on how it’s used, so it’s important to confirm this before proceeding.
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