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What are the benefits of a business owner purchasing their business premises inside their SMSF?

Many business owners hold their business premises inside their SMSF.  As a result  the following outcomes can be achieved:

Tax effectiveness

The business pays commercial rent to the SMSF and the SMSF pays tax on the rent at 15%. However the business (depending on its circumstances and structure) could have a tax deduction at a rate of up to 46.5% for the rent paid.

Asset Protection

Superannuation can be a very effective vehicle to protect your assets from creditors particularly in the event of bankruptcy.

Section 116 (2) (d) (iii) (A) (B) and (C) off the Bankruptcy Act, exclude superannuation as property that can be accessed by creditors (exceptions apply).

Succession planning

As the property stays inside the fund, when one member(s) dies, the surviving member(s) will retain an interest.

Tenancy security

Owning a property through your SMSF ensures that you won?t be at the mercy of a landlord.

The tenant (the business) will be more likely to look after the premises as the business owner and SMSF are essentially one and the same.


Previously many businesses wanting to purchase their own premises were forced to do so outside their Superannuation Fund.  This effectively tied up a lot of capital.  When a property is purchased inside a SMSF the interest expenses and other associated holding costs are met by both the rent received and super contributions received.