Thinking about using your super to buy commercial property? At Williamson Partners, we help business owners unlock the benefits of owning their business premises through a self-managed super fund (SMSF).

Can an SMSF Buy Property?

Yes — in fact, an SMSF is the only way you can directly purchase property using your superannuation. It’s a powerful strategy, especially for business owners who want to:

• Own their commercial premises,

• Lease them back to their business, and

• Build long-term retirement wealth in a tax-effective environment.

There are several strategies available, depending on your circumstances. Let’s explore them.

Why Use Superannuation to Buy Commercial Property?

Purchasing commercial property through your SMSF comes with several benefits:

• Favourable Tax Rates
  Rental income and capital gains are taxed at just 15% during accumulation phase — and may be entirely tax-free in retirement phase including a sale of the property.

• Invest in Yourself, Not Your Landlord
  Instead of paying rent to someone else, your business pays rent to your SMSF — helping fund your future retirement.

• Asset Protection
  Property held in an SMSF is protected from creditors if your business encounters financial difficulty.

• Control Over Your Business Premises
  Secure long-term tenancy for your business by owning the property within your super fund.

SMSF Strategies for Acquiring Commercial Property

1. Outright Purchase With SMSF Cash

The simplest approach — if your SMSF has sufficient funds, it can purchase the property directly from a third party or from you (provided it qualifies as ‘business real property’).

• Must be unencumbered (no mortgage)

• Market-rate rent required

• Lease agreement and all property expenses must be handled through the SMSF

2. Limited Recourse Borrowing Arrangement (LRBA)

If your SMSF lacks sufficient funds, it can borrow to buy the property via an LRBA. Under this arrangement, the property is held in a separate bare trust and the lender’s rights are limited to the property only.

• The only way a SMSF can borrow money

• Requires a bare trust structure

• Lender’s rights limited to the property

• Complex rules apply In-Specie Property Transfer

3. Non-Geared Related Unit Trust

Your SMSF and you (or a related party) each hold units in a trust which owns the property.
The related party may be you, your spouse or your business.

• No gearing allowed

• Rent paid to the trust and distributed according to ownership

• Ideal for joint SMSF/private ownership structures

4. Tenants in Common Ownership

Allows your SMSF and a related party to co-own property directly on title.

• Split income and expenses proportionally

• Property must not be mortgaged

• Common for 50/50 SMSF and private ownership

5. Do you own eligible commercial property personally? You may be able to transfer it into your SMSF as a contribution.

• Must meet contribution cap rules

• May trigger capital gains tax & stamp duty

• Property must remain debt-free and leased at arm’s length terms

Compliance Matters

Each of these structures must strictly comply with superannuation and tax law. The trustees of the SMSF are responsible for ensuring ongoing compliance — and penalties for getting it wrong can be significant.

That’s why it’s important to work with experienced professionals.

Get Expert SMSF Advice From Williamson Partners

At Williamson Partners, we combine accounting, superannuation and business expertise to deliver a tailored strategy for acquiring property within your SMSF. We can help you:

• Determine if SMSF property ownership is right for you

• Select the most suitable ownership structure

• Stay fully compliant at every step

Contact us today to arrange a confidential consultation — and take the next step toward owning your business premises through your super.