Whilst generally SMSF cannot acquire assets from related parties, there are some exceptions. SMSF can buy property from yourself, but strict rules apply:
It must be a business real (commercial) property.
The property must be used wholly and exclusively in one or more businesses (not necessarily in your business).
Being zone for business use is not enough.
The property must be transferred at market value.
If your SMSF pays less than market value for the property, the difference is seen as your superannuation contribution.
This may be beneficial in some cases, but you want to watch the contributions limits.
The SMSF cannot purchase the property for more than market value, as this is seen as providing financial assistance to members which is breach of SIS Legislation.
If the SMSF needs to borrow to fund the property purchase, this must be done through limited recourse borrowing.
Refer to our article on “Can SMSF borrow?”
If you wish to lease the property back to your business, you need to deal with your SMSF at arms’ length.
– paying a deposit
– having lease agreement
– paying on time
– being prepared to be evicted if the rent is unpaid
Basically, the same rules need to apply as if the property was leased to an unrelated party.
Remember, your deed needs to allow this in the first place and investment strategy and risk assessment needs to be taken into consideration.
For all your tax and SMSF needs, call your Brisbane accountants on 07 3160 7386.
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