Success story · SMSF commercial property
Scott bought his business premises with his super.
His business was already paying the rent. We helped him explore whether that money could form part of his family’s long-term wealth strategy instead.
A real client strategy. Names changed to protect privacy.
The deal at a glance
$1.1m
Commercial property purchase
$450k
Combined super position
$330k
SMSF funds toward the purchase
$770k
Commercial SMSF lending
$84k
Business rent, per year
70%
Approximate lending ratio
The situation.
Scott and Kate had spent years building a successful business. As it grew, the warehouse it operated from became an important part of how the business worked — but they didn’t own it.
The business was paying roughly $7,000 a month in rent, around $84,000 a year. At the same time, Scott and Kate had accumulated about $450,000 across their existing superannuation.
On the surface, those two things had nothing to do with each other. One was a business expense. The other was retirement money, invested somewhere else entirely.
The warehouse was not a speculative investment for them. It was where their team turned up every day. The premises worked and they had no reason to move — the only issue was that a significant amount of cashflow left the business every year and nothing came back with it.
The number that changed the conversation
$1.2 million
15 years of rent at today’s level
When we mapped their position out, one figure stood out: what the business was already spending on rent. At about $84,000 a year, staying put for another 15 years means more than $1.2 million in rent at today’s level alone — before a single review.
That does not mean buying the building removes the cost of occupying it. It doesn’t. There is a loan to service, rates, insurance, maintenance and the ordinary risks of holding property.
The question was narrower than “should we buy it”. It was whether an expense the business was going to carry anyway could sit inside a structure that worked for Scott and Kate rather than for someone else.
Deciding to buy the warehouse was the easy part.
The purchase had to work within their broader financial position, their superannuation strategy and the cashflow the business actually had. Five things had to line up.
The superannuation strategy
Whether moving the balance into an SMSF actually improved their position, or just added administration. That question gets answered before anything is bought.
The fund's structure and liquidity
An SMSF holding one large property still needs cash to meet loan repayments, insurance, rates and its own running costs, in the years the business has a bad quarter as well as the good ones.
Specialist commercial lending
SMSF loans are a distinct product with a smaller lender panel, lower loan-to-value ratios and stricter servicing tests than an ordinary commercial loan. Lender selection is part of the strategy, not an afterthought.
The lease between the business and the fund
The business is now the tenant of a fund its owners control. That lease has to be genuinely commercial and documented as such, at market rent, because the rules on related-party arrangements are strict and the penalty for getting them wrong is severe.
Business cashflow
The rent does not disappear. The business still pays it every month, and the strategy only works if it can keep doing so comfortably.
How the purchase came together.
Scott and Kate held approximately $450,000 in combined superannuation. After reviewing their wider position, an SMSF was established and their existing balances were rolled into it, with the fund positioned to acquire the premises.
The warehouse was purchased for around $1.1 million. The fund contributed roughly $330,000 toward the purchase, and the remaining $770,000 was funded through specialist commercial SMSF lending — an approximate 70% loan-to-value ratio.
To confirm before publishing: whether additional contributions were made before settlement to strengthen the fund’s position, and if so how much. The old page says the fund was “added to” before the deposit, which suggests they were — but the amount and timing are not recorded anywhere we can check, and this is exactly the kind of detail that makes the story land, so it is worth pinning down.
The property is leased back to the operating business on commercial terms at market rent. That is not a formality: the exemption that lets a fund hold premises used by a related business depends on the arrangement being genuinely arm’s length, and the tax consequences of getting it wrong are heavy. The rules that govern this are here.
Same rent. Different destination.
The money leaving the business each month did not change. Where it went did.
Before
- Scott & Kate's business
- Pays about $84,000 a year in rent
- An unrelated landlord owns the warehouse
Meanwhile
Their super sits invested somewhere else entirely, with no connection to the building the business works from.
After
- Scott & Kate's business
- Pays commercial market rent
- Their SMSF owns the warehouse
- The fund services the loan and holds the asset
Which means
Rent the business was always going to pay now sits inside the structure holding Scott and Kate’s retirement assets.
For the business, almost nothing changed.
Scott and Kate did not relocate. Their team kept working from the same warehouse, the business kept operating exactly as it had, and it kept paying commercial rent for the premises it occupied.
What changed was the ownership structure behind the building. Instead of paying rent to an unrelated landlord, the business now pays rent to the fund that owns the premises — the fund Scott and Kate will one day retire on.
An expense the business already had became connected to the thing it was never connected to before.
Thinking beyond the next financial year.
Business owners often spend years building value inside the operating business while treating property, super and personal wealth as separate decisions made at separate times.
Scott and Kate’s strategy connected two of them. Over time, the fund may pay down its borrowing, build equity in the property and continue receiving commercial rent from the business.
May, not will. Property values move in both directions, rent depends on the business continuing to trade, and a fund holding a single large asset carries concentration risk. Nothing here is a projection of a return.
Bringing the pieces together
The hard part was never the property.
This strategy crossed several parts of Scott and Kate’s financial life at once: financial advice, superannuation, SMSF structuring, commercial property, borrowing, business cashflow, and the tax and compliance obligations that follow the fund forever afterwards.
Handled separately, each of those decisions gets made by someone who can only see their own piece. The strategy was built around their whole position instead.
To confirm before publishing: which LINK businesses actually worked on this transaction. If LINK Wealth led the strategy, LINK Advance arranged the SMSF lending and LINK Advisors handled the tax and compliance, say so by name — it is the strongest proof the group model works. If it was not all three, this section says less and stays accurate.
What the work involved
- Reviewing whether an SMSF improved their position at all
- Establishing the fund and rolling the balances in
- Positioning the fund's liquidity for a purchase
- Finding a lender on the SMSF commercial panel
- Structuring a genuinely commercial lease back to the business
- Ongoing fund compliance, audit and reporting
Is this right for every business owner?
No.
Buying business premises through an SMSF can be a strong strategy in the right circumstances, and a poor one in the wrong ones. It carries strict superannuation rules, specific borrowing requirements, liquidity demands and ongoing compliance obligations that do not end at settlement. The property and the structure also have to make sense inside the fund’s overall investment strategy, including how much of the fund one building represents.
The value of advice is not knowing that an SMSF can buy commercial property. It is working out whether it should.
Could your premises become part of your wealth strategy?
If your business pays substantial rent and you have built a meaningful super balance, it may be worth understanding whether the two could work together — and, just as importantly, whether they should in your case.
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