You have been paying rent on the same warehouse for years. Someone else's name is on the title, and every quarter you write a cheque that builds their asset, not yours. So you have started wondering if your self managed super fund could buy the building and lease it back to your own business. It is a common thought among owners across the western industrial corridor, and it can be a smart move for the right person in the right situation. It can also go badly wrong if the wrong questions get asked too late.
What buying through an SMSF actually involves
An SMSF can purchase a commercial or industrial property, including the warehouse your business already operates from, provided strict rules are followed. The fund must pass what is known as the sole purpose test, the lease back to your own business must be on arm's length commercial terms, and if the fund borrows to buy the property it typically does so through a limited recourse borrowing arrangement. None of this is simple, and the rules are not the sort of thing to interpret from a blog post or a chat at a barbecue.
Buying business premises through super is a structure decision first and a property decision second.
The questions worth taking to your accountant
Where business owners get this wrong
Why the location still matters
Even with the structure sorted, the property itself still has to earn its place in the portfolio. Industrial land values across Melbourne's western growth corridor have shown consistent long term demand from owner occupiers and investors alike. Suburbs like Truganina, Laverton North, Derrimut and the broader Geelong corridor continue to attract businesses that need proximity to the port, the freeways and a growing population base. A warehouse that suits your business operationally should also stack up as a genuine long term asset for your fund, not just a convenient place to keep working.
The right structure and the wrong building will still cost you. The right building and the wrong structure will cost you more.
Where to from here
This guide is general information only and is not financial, tax or legal advice. Fairmont Property Group is a property agency, not a licensed financial adviser, and any decision about SMSF borrowing, contribution limits or fund structure should be made with your own accountant, financial adviser or SMSF specialist. What we can help with is the property side. If you are weighing up whether your business premises makes sense as an SMSF asset, get the numbers checked by your accountant first, then talk to us about whether the building itself, and the location it sits in, is worth owning for the long haul.
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Fairmont only sells and leases industrial property across Melbourne's western corridor and Geelong. That focus is deliberate. It means we know the buyers who are active right now and what they are prepared to pay.