SMSF

A property bought with your SMSF must only be used for investment purposes. Therefore, if you invest in a residential property with the SMSF, it cannot be lived in by the trustees of the SMSF or anyone related to them. (I.e. if you buy a house with your SMSF, you can’t rent it to a family member, and you can’t purchase a holiday home to live in part-time.)

Also, residential properties already owned by the trustees cannot be put into the SMSF or purchased by the fund. However, a commercial property (a premises for a business) can be sold to a self-managed super fund by its trustees. Unlike residential property, it can be leased to SMSF individual trustees, their businesses, and relatives. The rent must be set at the current market rate, and no “mates rates” can be given to the tenant.

At the end of the day, the property investment (whether residential or commercial) must function as a means to provide retirement benefits for the trustees and members. It is also important to note that if the property makes a loss, the tax losses cannot be offset against the personal tax of the trustees.

*The information on this page is of a general nature only and does not take into account your individual objectives, financial situation or needs. It should not be used, relied upon, or treated as a substitute for specific professional advice. For this reason, it is strongly advised that investors considering borrowing through an SMSF should obtain professional guidance before they establish their own super fund, as well as during its ongoing management.