SMSF Commercial Property & Business Real Property Guide: Lease-Back to Your Own Business in 2026

What This Strategy Is, in Three Sentences

[Foundational]

A working business owner uses their SMSF to buy the premises their business operates from, then the business pays rent to the fund. Done within the rules, business rent (a permanent expense) becomes payments toward an asset that funds your retirement, taxed at 15% in accumulation and 0% in pension phase rather than your personal marginal rate of up to 47%. Done outside the rules — particularly with rent set below market — it can expose the fund to penalty tax, sole-purpose-test issues, and an audit file the ATO will revisit for years.

This is allowed only for commercial property that meets the Business Real Property (BRP) test in the Superannuation Industry (Supervision) Act 1993. Residential property is governed by tighter rules and cannot be acquired from related parties or leased to them.

At a Glance

[Foundational]

• What BRP is. Real property used wholly and exclusively in one or more businesses (s.66(5) SIS Act 1993; ATO ruling SMSFR 2009/1). It's the principal exception that lets an SMSF acquire property from a related party and lease it back to a related party on arm's length terms.
• Loan numbers. Commercial SMSF rates (April 2026) typically 6.6%–7.5% for qualified borrowers; broad range 6.25%–9.95%. Maximum LVR generally 60%–70% commercial. Specialist non-bank lenders dominate.
• GST rule. Mandatory registration once commercial rent exceeds $75,000 annual turnover. Voluntary registration usually pays for itself when the tenant is GST-registered.
• The risk to manage. Below-market rent on a related-party lease can lead to non-arm's-length income (NALI) treatment for that income stream, generally taxed at the highest marginal rate.
• Stamp duty quick reference. NSW $750 nominal duty (s.62A); Victoria $200 (s.41); other states generally full duty.

What Is Business Real Property and Why Does It Matter?

[Foundational]

Business Real Property is defined in section 66(5) of the Superannuation Industry (Supervision) Act 1993:

"Business real property", in relation to an entity, means: any freehold or leasehold interest of the entity in real property … where the real property is used wholly and exclusively in one or more businesses (whether carried on by the entity or not).

Three pieces matter. Real property is land and buildings (not equipment, not goodwill). Wholly and exclusively in one or more businesses is the use test. Whether carried on by the entity or not lets you buy a building used by someone else's business and still satisfy the test.

Why BRP Is the Pivot Point [Working detail]

The default rule is restrictive. Section 66 SIS Act prohibits the trustee from acquiring an asset from a related party. The list of exceptions is short — listed securities, BRP, in-house assets within the 5% cap, and assets acquired under specific commutation/death-benefit rules. BRP is the one most relevant to property investors because it's the only exception that lets a trustee acquire a building from themselves, their spouse, their company, or their family trust at market value.

Section 71(8) SIS Act adds a second exception: a leasehold interest in BRP held by an SMSF and leased to a related party is excluded from the in-house asset definition, provided the lease is on arm's length terms. Without this, leasing your own premises back to your own company would push the fund's in-house asset ratio over the 5% statutory limit.

These two carve-outs working together — acquisition under s.66 + leasing under s.71(8) — are what make a lease-back to your own business workable. Strip either out and the structure does not function.

How Does the "Wholly and Exclusively in a Business" Test Work?

[Working detail]

SMSFR 2009/1 is the ATO's principal guidance — 165 paragraphs of examples and reasoning issued in 2009 and still authoritative in 2026. The test has two limbs.

Limb 1 — Is There a Business Being Carried On?

A 'business' has structure, scale, and effort: profit-making intent, repetition and regularity, commercial character (records, ABN, branding), system and organisation, and scale appropriate to the asserted business.

A dental practice, engineering shop, pharmacy, childcare centre, accountancy office, manufacturing operation, transport depot, or retail store routinely qualifies. A single residential rental property held by an investor generally does not, on its own, satisfy the business limb under SMSFR 2009/1.

Limb 2 — Wholly and Exclusively in That Business

'Wholly and exclusively' is read literally. The ATO accepts:

• Temporary vacancies while genuinely seeking a tenant do not break the test
• Minor incidental non-business use can be tolerated
• Multi-tenant properties qualify if every tenant uses their portion in a business
• Use by an entity other than the owner is permitted by the explicit words of s.66(5)

Worked Examples From SMSFR 2009/1

Where your property does not match a clean example, an alternative is to apply for a private binding ruling (PBR) from the ATO before settlement.

What Usually Fails the BRP Test

[Foundational]

A practical checklist of patterns that most often disqualify a property from BRP status:

• Mixed-use buildings with a self-contained residential flat that isn't trivially incidental
• Holiday houses let on short-stay platforms part of the year, with personal/owner use the rest
• Hobby farms with a small herd, no real sales, no ABN as a primary production business
• Vacant land held for speculation or future development, with no current business use
• Properties leased rent-free or below-market to a relative who 'could' use them in a business but does not in practice
• Industrial sites where a member uses a workshop bay for personal hobby projects
• Storage facilities holding significant volumes of members' personal items
• Token business use staged days or weeks before a sale to attempt to qualify the property

Where the answer is genuinely unclear (multi-tenant mixed-use, short-stay portfolios, agistment arrangements), specific advice and ideally a PBR are warranted before contracts are signed.

How Do I Structure an Arm's Length Lease to My Own Business?

[Working detail]

Once the property is in the SMSF and you intend to lease it to your operating business, the lease becomes the centre of compliance attention. Three rules apply.

Rule 1 — A Formal Written Lease

The lease must include parties (SMSF trustee as lessor; operating entity as lessee), term, rent at market, outgoings apportionment, use clause confirming exclusive business use, maintenance and insurance obligations, default and termination provisions, and GST treatment. Use a commercial lease template prepared by a lawyer. Retail leases in NSW, Victoria, and Queensland have additional statutory disclosure obligations under retail leases legislation that may apply.

Rule 2 — Rent at Market Rate

Rent must equal what an unrelated tenant would typically pay for the same premises in the same market at the same time. Acceptable evidence: independent valuer's market rent assessment (gold standard), commercial agent's letter with comparable lease evidence, comparable lease registrations, or two independent agent appraisals averaged. A formal valuation is not required every year, but rent should be reviewed annually against fresh market evidence — many auditors now expect a current-year market-rent letter on file each financial year.

Rule 3 — Outgoings, Variations, and Reviews on Commercial Terms

Commercial leases typically pass-through outgoings (council rates, insurance, water, body corporate) to the tenant. CPI annual increases or fixed-percentage step-ups are common. Whatever mechanism is chosen must be documented in the lease and applied. Quietly skipping a CPI increase 'because the business had a bad year' can create a NALI exposure.

NALI and NALE — A Brief Technical Note [Advanced]

What Does the ATO Accept as Market Rent Evidence?

[Working detail]

Market rent evidence has tightened materially in 2025–26. The ATO has signalled that related-party leases will remain a strong audit focus, and from 1 July 2025 trustees have generally been expected to maintain additional documentation for related-party lease agreements as part of fund records.

A defensible market rent file contains:

1. Initial rental valuation at lease commencement — comparable evidence, methodology, recommended rental range
2. Lease document consistent with that report
3. Annual market rent letter refreshed each financial year
4. CPI / market reset working papers for the actual review applied
5. Trustee minutes recording the decision to accept the rent for the coming year
6. Receipts and bank records evidencing rent paid on the dates the lease specified

Where the lease has been in place for several years and rent has drifted, a one-off rental reset to current market is generally permitted before the next audit. The trustee resolution should reference the new evidence, the new rate, and the effective date.

If the ATO challenges a trustee's valuation, they may obtain their own. The cost of a $1,000 annual market-rent letter is materially less than the cost of contesting a NALI assessment three years later.

SMSF Commercial Loan Rates and the 2026 Lender Landscape

[Working detail]

Commercial SMSF lending in 2026 sits in a different market to residential. Most major banks have exited or pulled back materially.

Indicative Rates — April–May 2026

Safe Harbour — What It Is, and What It Is Not

The safe harbour rate (PCG 2016/5, updated annually) is an ATO administrative shortcut for related-party LRBAs. It is not a legal requirement and does not apply to third-party commercial loans.

If a related-party loan's terms meet the safe harbour parameters in full (rate, term, LVR, P&I, charge), the ATO will generally not apply NALI to the income generated by the asset on grounds of the loan terms alone. That's the value of the shortcut.

Safe harbour is not the only pathway. A related-party loan that does not meet the safe harbour can still be acceptable if the trustee can demonstrate, with contemporaneous independent evidence (lender quotes, a broker letter, or comparable transactions), that the actual loan terms are arm's length — the kind of terms a commercial third-party lender would have offered for the same deal at the same time. The legal test is arm's length under s.109 SIS Act and s.295-550 ITAA 1997. The safe harbour is one administrative route to demonstrate compliance.

A loan from a third-party commercial lender at the lender's commercial rate (often well below 8.95%) is governed by ordinary arm's length principles. The 8.95% safe harbour rate does not apply.

Loan Structure Mechanics

• Limited Recourse Borrowing Arrangement (LRBA) required — lender's recourse limited to the property held in a separate bare trust
• Bare trust setup typically $1,500–$3,500 for legal and stamp duty
• Maximum LVR: typically 60–70% commercial (vs 70–80% residential)
• Term: typically 15–25 years
• Covenants: tighter than residential — DSCR, valuation refresh, cash buffer

For a $1.2M property at 70% LVR, plan for the SMSF to put roughly $450K–$460K to work after deposit, stamp duty, legal/custodian costs, and a 12-month buffer. If the fund cannot put that to work and still hold a sensible cash reserve, it is not large enough for the deal yet. See SMSF Borrowing & LRBA Strategies 2026 for the full LRBA framework, lender comparisons, and DSCR worked examples.

Should an SMSF Register for GST on a Commercial Property?

[Working detail]

Mandatory vs Voluntary

An SMSF must register for GST when its annual GST turnover exceeds $75,000. Commercial rent counts toward this turnover; residential rent does not (it's input-taxed). For most funds with even one commercial property, the rent will push the fund past the threshold.

Below the threshold, voluntary registration is usually still worthwhile when the tenant is GST-registered — the math works for both parties.

The Going Concern Exemption — All Conditions Must Be Met

Where the vendor is selling a leased commercial property with the tenant in place, the sale can be structured as a 'going concern' under section 38-325 GST Act. No GST is payable on the purchase price if all of the following apply:

• Both vendor and purchaser are registered or required to be registered for GST at settlement
• The vendor supplies all things necessary for the continued operation of the enterprise (typically property + existing lease + related rights)
• The vendor carries on the enterprise until the day of supply
• The supply is for consideration
• Vendor and purchaser agreed in writing that the supply is of a going concern (typically a special condition in the contract)

Miss any condition — including the written agreement — and the going concern treatment fails. GST applies to the purchase price (recoverable on a BAS once registered, but a real cash flow event of $80K–$150K on a typical commercial purchase).

If the property is sold vacant or you're acquiring to occupy yourself, the going concern exemption is generally not available.

Reduced Credit Acquisitions [Advanced]

A separate carve-out: Reduced Credit Acquisitions (RCAs) allow the fund to claim 75% of the 10% GST on certain expenses tied to financial supplies — actuarial fees, brokerage, fund administration, investment management. Available regardless of full GST registration on the property.

Depreciation — Why Commercial Outperforms Residential

[Working detail]

Depreciation comes in two divisions of the Income Tax Assessment Act 1997.

Division 43 — Capital Works

Building structure — walls, roof, slabs, plumbing, electrical wiring, doors, fixed cabinetry. Standard rate 2.5% per year over 40 years for buildings constructed after the relevant statutory dates.

Where commercial wins: certain industrial buildings used in eligible activities (manufacturing, primary processing, certain short-term traveller accommodation provisions) qualify for accelerated rates of 4% over 25 years, materially front-loading deductions.

Division 40 — Plant and Equipment

Removable, mechanical, or non-structural items — air conditioners, hot water systems, blinds, carpets, lifts, dental chairs, sterilisation equipment, manufacturing plant, security systems, kitchens. Effective lives are set by ATO Taxation Ruling TR 2024/1 (updated annually).

Where commercial wins decisively: the 9 May 2017 rule that prevents Division 40 claims on second-hand plant and equipment in residential properties does not apply to commercial property. A commercial buyer of an existing building still claims Division 40 depreciation on the existing fit-out — air conditioning, security, kitchens, fire systems — based on the assessed value at acquisition. For medical/dental clinics, this is the headline deduction.

Combined Depreciation — Indicative Numbers

A quantity surveyor's depreciation schedule typically costs $700–$1,200 and the cost is itself deductible.

Stamp Duty Concessions for In-Specie Transfer of BRP

[Working detail]

Two states offer meaningful stamp duty concessions when a member transfers BRP they already own personally into their SMSF. The mechanics are deliberately narrow but the saving can be material.

NSW — Sections 62A and 62B Duties Act 1997

Where a member transfers BRP they own personally into their SMSF, section 62A generally charges nominal duty of $750 (transfers on or after 1 February 2024) provided technical conditions are met:

• The transferor is a member of the receiving SMSF
• The property is held for the benefit of the transferor member only
• The property is used solely for the purpose of providing retirement benefits for the transferor member

Section 62B applies where the SMSF acquires BRP using an LRBA: nominal duty of $500 on the declaration of trust by the custodian holding the property on bare trust.

Victoria — Section 41 Duties Act 2000

Where BRP is transferred from an individual or trustee into their SMSF and there is no change in beneficial ownership, concessional duty of $200 generally applies. Conditions include: transferor was beneficial owner before the transfer; transferor is a member of the SMSF; property is BRP at the time of transfer; transferor's beneficial interest is preserved.

Other States

Queensland, South Australia, Western Australia, Tasmania, ACT, and NT do not generally offer concessions of comparable magnitude. WA permits nominal duty in limited circumstances under specific Duties Act conditions, but it is rarely available in practice. Trustees in these states typically pay full transfer duty on in-specie transfers — confirm with a duties lawyer for your specific state and fact pattern.

Periodic Valuation and Revaluation Requirements

[Working detail]

When You Need Each Type

Why Valuation Discipline Matters More in 2026

1. Pension phase entry. The proportionate method calculation depends on accurate market value at the start of pension phase. A stale valuation at this trigger can permanently distort the exempt-current-pension-income (ECPI) calculation.
2. Division 296 measurement. From 1 July 2026, every member's Total Super Balance is measured at 30 June. Property revaluations flow into the Division 296 earnings calculation. Lumpy revaluations — skipping years and catching up — create avoidable volatility and can overstate Division 296 earnings in the catch-up year.
3. Auditor expectation. SMSF auditors are required to obtain sufficient appropriate evidence of fair value. The ATO's compliance focus has lifted documentation expectations, and 'last year's number' is rarely sufficient by itself.

The total annual cost of valuation discipline (kerbside or desktop) is materially less than the cost of a bad pension-phase calculation, a forced restatement, or a Division 296 dispute.

Liquidity Stress Test — What Vacancy Actually Costs

[Working detail]

The structure works while rent is flowing; the question is what happens when it isn't.

Worked Stress Scenario — $1.2M Property, 70% LVR

A 12-month vacancy on this asset costs the fund roughly $92K–$102K in cash. The fund needs that liquid — in cash, term deposits, or readily realisable assets — before the LRBA is signed. Lender covenants typically require something close to a 12-month buffer; trustees should plan to it independently rather than treat the lender's minimum as a target.

Where Vacancy Risk Actually Sits

• Related-party tenant — if the operating business closes or downsizes, the fund needs an unrelated commercial tenant on arm's length terms
• Single-tenant building — higher risk than multi-tenant; one departure equals 100% vacancy
• Specialist fit-out — the more customised for one use (dental, food production, scientific), the longer re-tenanting takes

Practical Mitigations

• 12-month rent buffer in liquid assets at all times
• Insurance covering rent loss for an extended period (typical commercial policies cover 12–18 months)
• Standing relationship with a commercial agent for the precinct
• Investment strategy that explicitly caps property concentration so the fund retains liquid headroom

ATO Audit Triggers for SMSF Commercial Property in 2025–26

[Working detail]

The ATO has flagged related-party transactions, sole-purpose-test compliance, and NALI / NALE as ongoing focus areas through 2025–26. Commercial property in an SMSF — particularly with a related-party tenant — sits at the intersection of all three.

Division 296 and Commercial Property

[Working detail]

The Chain — How Commercial Property Drives Division 296 Tax

The path from owning commercial property to a Division 296 tax bill runs through three steps:

1. Property revalues at 30 June each year. A $1.2M property growing at 4% adds $48,000 to its value in year one.
2. Member TSB rises by the change in net asset value attributed to the member. The $48K paper gain flows into closing TSB even though no sale has occurred.
3. Division 296 earnings equal the change in TSB year-on-year (after adjusting for net contributions and withdrawals). For a member already at or above the $3M threshold, the proportion of earnings above $3M attracts an additional 15% tax — payable from non-super funds or by elected release from super.

Worked illustration: a member with TSB at $4M holding a $1.2M commercial property that revalues to $1.4M during the year (no other balance change). The $200K paper gain flows into closing TSB ($4.2M). Proportion of earnings above $3M: ($4.2M − $3M) ÷ $4.2M ≈ 28.6%. Division 296 earnings: $200K × 28.6% ≈ $57,200. Division 296 tax (15%): roughly $8,580 — payable on a paper gain that produced no cash.

The Cost-Base Election — One-Off Lever [Advanced]

For the 2025–26 income year, an SMSF can generally elect to reset the cost base of CGT assets held at 30 June 2026 to their market value at that date for Division 296 purposes (subject to current ATO guidance). For a commercial property bought in 2014 for $750K and worth $1.65M at 30 June 2026, the election shelters $900K of pre-commencement gain from Division 296. The election is lodged with the 2025–26 SMSF return.

This is a one-off, fund-level decision. It interacts with shares, listed funds, and any pre-CGT holdings, so the modelling has to be done at the portfolio level. See our Division 296 SMSF Property Action Guide for the full framework, worked examples at $2.5M / $3.5M / $5M / $8M TSB, and the cost-base election decision tree.

Liquidity Planning for Tax on Paper Gains

Commercial property revalues but does not produce cash. A member assessed for Division 296 tax on an unrealised gain must find the cash from non-super funds, an elected release from super (subject to limits), or eventually a forced asset sale. Trustees acquiring commercial property in 2026 onwards should model this explicitly: at year 5, year 10, year 15, what does projected TSB look like, and where does a Division 296 tax payment come from in that year?

For most commercial-heavy SMSFs in the $3M–$10M TSB band, the answer is typically a combination of cost-base election + liquidity buffer + spouse equalisation. None of those are quick fixes after the fact.

Practical Steps for Commercial Property Trustees in 2026

1. Lock in a 30 June 2026 valuation — commercial valuers are running 4–6 weeks lead time
2. Model the cost-base election decision at the portfolio level before lodging the 2025–26 return
3. Smooth annual revaluations going forward to avoid lumpy Division 296 earnings in catch-up years
4. Consider spouse equalisation legitimately through contribution splitting and recontribution where balances are uneven

Case Study — Dentist Buying a $1.2M Clinic

[Foundational]

Profile. Dr Anika R., 46, runs a 2-chair dental practice in Newcastle, NSW. Currently leases her 180m² freestanding clinic at $72,000 a year + GST + outgoings. Her landlord has now listed the property for sale at $1.20M ex-GST.

Personal SMSF balance: $620,000. Spouse balance (in the same fund): $480,000. Combined fund balance: $1.10M.

Acquisition Structure

After settlement the fund holds $645,700 in offsetting non-property assets, leaving the property allocation at roughly 53% of fund balance.

Year 1 Cash Flow (Inside the Fund)

The lease is reset to a fresh independent market valuation: $78,000 per year + GST + outgoings.

Tax loss carried forward, no fund tax payable in Year 1. Cash neutral after principal.

20-Year Outcome (Indicative Modelling)

Assuming 3.5% p.a. capital growth and 3% p.a. rent growth, with the LRBA fully repaid in year 18:

These figures are illustrative only — actual outcomes depend on rate movements, tenant performance, capital expenditure, and pension-phase timing. At Year 20, both members are likely in pension phase. A sale is generally exempt from CGT at the fund level in pension phase (subject to ECPI calculation and Division 296 considerations applicable in the relevant years).

Exit and Endgame

[Working detail]

The structure works while the property is held and rent is flowing. The other half of planning is what happens at exit.

Scenario 1 — Selling Pre-Retirement (Accumulation Phase)

Sale of a commercial property held in accumulation phase typically triggers a capital gain at the fund level, generally taxed at 15% with the one-third CGT discount (effective rate ~10%) where the asset has been held for 12+ months. Sale proceeds add to fund cash.

Strategic considerations: capital gain in the year of sale increases the fund's TSB and may have Division 296 implications. Timing the sale for a year where the member is below or close to the threshold can be material.

Scenario 2 — Selling in Pension Phase

Sale during pension phase generally produces an exempt capital gain at the fund level (subject to ECPI calculation and any non-segregated method considerations). This is typically the most tax-efficient exit.

Note: Division 296 still applies on the way through the holding period — paper gains during accumulation flow into the calculation. The pension-phase exemption applies to the capital gain at sale, not to the unrealised gains in earlier years.

Scenario 3 — Selling the Practice but Keeping the Property (Most Common)

The owner sells their practice or business at, say, age 60 to an incoming operator; the SMSF retains the property and the new operator takes over the lease at fresh market rate. Outcomes:

• Practice sale generates personal proceeds (typically partly assessable as goodwill, partly capital gain)
• SMSF continues to own a tenanted commercial asset with a new arm's length tenant
• Lease re-papered at acquisition by the new operator at fresh market terms
• Property remains BRP — leased to a different business, not to the original member's

In many cases this is considered the strongest succession outcome because the asset continues to produce income through retirement, though specifics depend on the operator transition and lease covenants.

Scenario 4 — Business Closes; Property Re-Let to an Unrelated Tenant

If the operating business closes, the SMSF re-tenants the property to an unrelated commercial party. The property remains BRP because BRP requires use in a business — not necessarily the trustee's. Time to re-let depends on submarket, fit-out specificity, and pricing. Trustees should notify the lender (LRBA covenants typically require disclosure of vacancy), engage a commercial agent, fund the cash gap from reserve, and document the re-tenanting effort in trustee minutes.

Scenario 5 — In-Specie Distribution to Member [Advanced]

Where the property is to be distributed to a member as part of a pension or lump sum payment, in-specie distribution is permitted (subject to the deed). Market value at distribution counts toward the member's TBC and pension drawdown calculation. Stamp duty consequences vary by state. In-specie distribution is rare in practice for commercial property because it transfers a leveraged, illiquid asset back to the member personally — typically less efficient than selling at the fund level and distributing cash.

Investor Profiles — Who This Strategy Fits

[Foundational]

Decision Framework

[Foundational]

Buy your business premises through your SMSF when:

• You currently pay business rent and the asset is roughly comparable in price to current rent × 12–15
• You have $400K+ in super (preferably $500K combined for two-member funds)
• The premises is unambiguously BRP and likely to remain so for 15+ years
• Your operating business has stable revenue and a multi-year time horizon
• You're prepared for the compliance overhead — formal lease, annual market-rent letter, audit-ready documentation
• Your time horizon to preservation age is 10+ years (ideally 15+)

Stay in personal name (or skip) when:

• Your business is volatile or has a 5-year horizon that ends before the LRBA does
• You need negative gearing against current salary (not available in SMSF)
• Your super balance is below $300K and a single-asset fund would over-concentrate
• The premises is mixed-use, short-stay, or fails the BRP test on the facts
• You're within five years of retirement and don't want a leveraged commercial asset on your retirement balance sheet

Consider a phased strategy when:

• Fund balance is currently too small — build via contributions for 3–5 years, then acquire
• You own premises personally and don't want a single-year CGT spike — stage in-specie transfer over 2–3 years using non-concessional caps
• You anticipate becoming a business owner within five years — hold SMSF in cash/equities, then activate when the business is established

Risk Checklist

Implementation — Your 90-Day Plan

[Foundational]

Days 1–14 — Eligibility and Strategy

• Confirm SMSF balance and DSCR capacity (or build a contribution plan to get there)
• Run the BRP test against your target property with your lawyer/accountant
• Set investment strategy parameters — concentration caps, liquidity rules

Days 15–35 — Property and Lease

• Engage a commercial valuer for both purchase-price opinion and market-rent assessment
• Draft lease terms with a commercial property lawyer
• Confirm GST treatment (going-concern conditions met?) with your tax adviser

Days 36–60 — Lender and Bare Trust

• Approach 2–3 specialist commercial SMSF lenders; compare rate, LVR, covenants, fees
• Engage bare trust solicitor and set up custodian; lodge LRBA application

Days 61–90 — Settlement and Activation

• Execute purchase contract (going concern in writing if applicable) and settle
• Execute lease at fresh market rent; lodge GST registration if applicable
• Engage a quantity surveyor; update investment strategy and trustee minutes

In-specie transfers from a member or related entity typically run 120–150 days because of additional duty paperwork (s.62A NSW or s.41 VIC) and contribution-cap modelling.

Frequently Asked Questions

The Bottom Line

The Business Real Property exception is one of the few structural pathways in Australian super law that lets a working business owner own their own commercial premises through their SMSF, lease it to a related party, and convert ongoing business rent into asset accumulation in a tax-concessional structure.

The whole strategy turns on three disciplines: getting the BRP test right at acquisition, charging full market rent on a properly papered lease, and maintaining audit-grade documentation through the holding period. Get those right and the fund holds a long-duration, tax-efficient retirement asset. Get them wrong and the NALI / NALE framework can convert a 15% income stream into a 45% one — or trigger a 5% in-house asset breach that takes years to unwind.

Division 296 from 1 July 2026 adds a new layer for funds at or approaching the $3M individual TSB threshold. The cost-base election available with the 2025–26 SMSF return is the central one-off planning lever for property-heavy funds — see our Division 296 SMSF Property Action Guide for the full framework.