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SMSF Purchasing Commercial Property

When you have time on your side, it’s not how much you earn, but how much can you really save.

SMSF Purchasing Commercial Property

Most commonly, people use their SMSF to buy a commercial property to lease back through their business. But there are a few specific conditions you need to be aware of if you’re considering this:

1. Commercially competitive: The terms of the lease must be commercially competitive. You aren’t allowed to lease it back for “mates’ rates” to give yourself a financial advantage. The ATO monitors and audits SMSFs regularly to ensure all arrangements are compliant.

2. No rental holiday: When things get tight and there’s an income downturn, you aren’t allowed to skip the rent for a payment. The payments must be made on time, every time, in full.

3. Valuations: Compliance of the SMSF relies on regular valuations being done on the commercial property. This can be time consuming and requires a lot of paperwork.

4. Sole purpose test: The investment must satisfy the ‘sole purpose’ test, which is that its sole purpose is to provide retirement benefit to the fund’s members.

Still interested?

Ultimately, the test of whether you should buy a property with your SMSF comes down to making a rational investment decision based on facts and advice.

Be sure to ask the following questions about your prospective investment:

Is the property a good investment?

Will it appreciate in value?

What are the risks?

What is the yield?

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* Terms and conditions apply

The information presented is general in nature and does not take into account your personal goals and objectives. This information does not represent financial product advice. You should always seek independent legal and financial advice before making a decision in relation to a financial product. Read the Product Disclosure Statement (PDS) before making a decision.

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1300 799 103 

info@polarishomeloans.com.au

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