Can my SMSF buy property from me or a relative?

Only if the property is business real property, meaning land and buildings used wholly and exclusively in a business, and the fund pays market value. A fund can't buy a house, unit or holiday home from a member or relative, even at full price. This comes from section 66 of the Superannuation Industry (Supervision) Act 1993.

Who is a related party?

A related party of your fund includes every member, each member's relatives and business partners, and companies or trusts that members or their associates control or influence. Relatives include parents, grandparents, brothers, sisters, uncles, aunts, nephews, nieces and children of a member or their spouse, and the spouses of all of them. So the rule catches your own property, your parents' and your children's, and property held by your family company or trust.

What counts as business real property?

The Act defines it as a freehold or leasehold interest in real property used wholly and exclusively in one or more businesses, whether or not the owner runs the business (section 66(5)). Typical examples are a factory, warehouse, office or shop that is used in a business, or leased to a business. Private use can stop a property qualifying. Farms have a special rule: land used in a primary production business can still qualify with a home on it, if the home is on no more than 2 hectares and the main use of the whole property isn't private. If a property is partly business and partly private, get advice before relying on the exception.

Why does market value matter?

The exception only applies to a purchase at market value, so the fund needs a proper valuation. The ATO publishes valuation guidelines for SMSFs. Getting the price wrong has consequences both ways:

• if the fund pays more than market value, money has left the fund for a member's benefit
• if the fund pays less, or nothing, the value handed over is a contribution and counts toward the member's contribution caps
• if the deal isn't at arm's length, some or all of the income from it may be taxed at the highest marginal rate as non-arm's length income.

Can my business keep using the premises?

Yes. Leasing a fund asset to a related party normally makes it an in-house asset, which is capped at 5% of the fund. Business real property is carved out of that rule if it stays business real property throughout the lease and the lease is enforceable (section 71(1)(g)). In practice that means a written lease at market rent, with the rent actually paid. Our article How to buy an SMSF property to rent to your business covers the lease in more detail.

What about stamp duty and tax?

A transfer from you to your fund is a change of ownership, so duty applies unless the state gives an exemption or concession, and each state does this differently. In Victoria, the State Revenue Office can treat a transfer by a member to their complying fund as not changing who benefits from the property, which may make it exempt. It asks for a statutory declaration, including whether any money changed hands, lodged before settlement. In New South Wales, an eligible transfer into an SMSF by its members attracts concessional duty of $750. For tax, you are selling the property, so capital gains tax needs to be worked out with your accountant before you sign.

Can the fund borrow to buy it?

Yes, if the property is business real property. The August 2026 borrowing change doesn't stop this, but the property must stay business real property for the whole life of the loan. Selling to a friend who then sells to your fund doesn't get around the rules: section 66(3) prohibits schemes designed to do that. See Buying commercial property in an SMSF.