Client Profile
David and Melissa, both in their early 50s, run a successful allied health clinic in Melbourne. Their SMSF had a balance of $480,000, and they were paying over $80,000 a year in commercial rent for their clinic premises.
The Challenge
They wanted to stop paying rent to a landlord and instead purchase their own premises through their SMSF, but didn’t know how the structure worked or if their fund balance was sufficient. They were also unsure which lenders would consider the rent they currently paid as evidence of loan servicing capacity.
Our Strategy
- Recommended a lender that allows SMSFs to purchase commercial property with up to 70% LVR
- Structured the loan using their existing SMSF balance for the deposit, costs, and minimum liquidity
- Used their existing lease agreement to show rental income servicing capacity, since the business would become the tenant
- Coordinated with their accountant and solicitor to set up the bare trust and leaseback arrangements within ATO guidelines
The Result
- Purchased a commercial property for $960,000 through their SMSF
- Their business now pays rent directly into their super fund instead of to a landlord
- Created a long-term retirement strategy with stable, tax-effective income via rental payments
Conclusion
By purchasing their business premises through their SMSF, David and Melissa turned an expense into an investment. With the right guidance and lending structure, owning your commercial premises through super can be a game-changer for business owners.
