SMSF Finance

SMSF Finance – Commercial Property

You can also hold commercial property, including your own business premesis, through your SMSF.

Many business owners are selling their business property asset (trading premises) to the SMSF which then allows for considerable tax incentives.

Whilst the property still needs to meet the sole purpose test of providing retirement benefits to its members, when dealing with commercial property, an SMSF can generally buy the property and lease it back to a member or a related party of the fund – including the member’s business.

An arm’s length sale price and lease arrangement is particularly important when acquiring and/or leasing property to a member or related party of the fund.

Max LVR (Loan to value ratio) 70%.

NOTE: Any property held by your Super Fund must meet the sole purpose Test:

  • Retirement benefits to members of the fund or;
  • Benefits to dependents if the member dies;
  • A Bare Trust deed will need to be established upon purchasing a new asset;
  • We recommend seeking financial advice or speak to your accountant prior to purchase;

SMSF Finance – Residential Property

An SMSF can also invest in residential property so long as it’s at ‘arms length’ ie, not purchased from a related party (family) of a member.

Max LVR (Loan to value ratio) 75%.

NOTE:

  • The family home cannot be owned by the SMSF;
  • The property cannot be rented by a related party or member;
  • Retirement benefits to members of the fund or;
  • Benefits to dependents if the member dies;
  • A Bare Trust deed will need to be established upon purchasing a new asset;
  • >Any property held by your Super Fund must meet the sole purpose test – sole purpose test

We suggest speaking to your trusted financial planner or accountant prior to seeking finance within your SMSF.

If you wish to be introduced to a SMSF accounting specialist or want a better understanding of the complexities behind SMSF lending, please contact bcc@bluecranecapital.com.

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