Some of the most important decisions a business owner will make are about their premises: whether to rent or buy, where to base the business and even the style of the property are important to get right. For those with an SMSF, there is one more option to consider: landing business premises and an investment property at the same time.
Figuring out whether buying your commercial premises through your self-managed super fund (SMSF) is an option that’s suitable for you is imperative to the success of your investment.
There can be many gains through purchasing commercial property through your SMSF, including creating a certain level of freedom by smart use of resources.
“It frees up capital for the business owner. They are unlocking super to do more for them,” explains Mark Grange Liberty Financial Adviser SMSF specialist.
Then there are the tax benefits that may be available which your accountant/financial adviser can outline.
On the flip side of the shiny self-management coin, the SMSF specialist offers a word of warning regarding obligation. “There is an absolute element of responsibility on compliance matters. You are the trustee of an SMSF and you need to understand what those responsibilities entail,” the SMSF specialist warns.
You must pay commercial rates for rent through a prearranged lease agreement and, although having a protected asset is great for some businesses, it also means that equity is locked within the fund. You can’t take earnings elsewhere.
If you would like to find out more about purchasing a commercial or residential property in you Super fund contact Mark Grange – Liberty Financial Adviser