By Cameron McDonald, Mortgage Choice in the North Western Suburbs (CLICK HERE to download a PDF version of this Info Sheet #2)

A common investment strategy for small business owners is to use their Self-Managed Super Fund (SMSF) to buy their business premise.

Their SMSF then leases the property back to their business.

By doing this, small business owners:

  1. Can hold their important business asset (their work premise) in a tax-effective structure; and
  2. Use capital from their SMSF to buy the property – rather than tie up important business capital.

When a business premise is leased by a SMSF to a business, it is important that the transaction occurs on an arm’s length basis (i.e. on a commercial basis).

There should be a formal lease agreement drawn up that is independently verified by a reputable professional, such as a local real estate agent.

The formal lease is a binding document, which means the trustees of the SMSF must enforce the terms of the lease. Rent has to be paid on time lest the tenant incur a penalty.

The laws surrounding the types of business properties that can be purchased through an SMSF are complex. To understand the intricate ins and outs of buying a business dwelling through your SMSF, it is important to visit the Australian Taxation Office website and speak to your mortgage broker and financial adviser.


About Cameron McDonald

Cameron McDonald is a Mortgage Choice franchisee in Melbourne, helping thousands of Australians with their property and finance goals over the last 13 years. He specialises in residential and commercial lending.

Contact Cameron at: or by calling him on 0409 559 697

CLICK HERE to download a PDF version of this Info Sheet #2

Disclaimer: The Base Brooklyn Info Sheets are created in conjunction with Mortgage Choice.  The investment decision of all interested parties should be based on advice from a qualified Financial Planner or similar professional and on their own research before making any investment decision. This document contains information compiled by Mortgage Choice to assist you in conducting your due diligence. Please ensure you corroborate all information contained within this document. The Base Brooklyn will not accept responsibility for inaccurate information provided from external sources or third parties.


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