Can I sell my property to my SMSF?

The answer depends on a number of factors – primarily the type of property and what will happen after the SMSF buys it .There are strict rules about the sorts of things SMSFs can buy from “related parties”. The term “related party” has a specific definition when it comes to superannuation but as a general rule it includes the members and trustees of the fund, their family and other entities they control .

But to be classified as a business, the activity has to be pretty substantial. Unfortunately, one property rented out via Airbnb is unlikely to be enough. The SMSF can own residential property but it would need to buy it from someone entirely outside the family. And there’s another catch. Even if the SMSF is fine to buy the property , it can’t be rented back to the family. That’s because SMSFs can’t normally lease assets to related parties. In fact, if the property was a holiday house, it couldn’t even be used occasionally by the family.But what about commercial property ? The position is entirely different here.

All sorts of things can cause SMSFs to have a NALI problem: not paying enough for it in the first place, receiving too much rent or even incurring expenses that are lower than commercial terms. Artificially low expenses can be more common than you’d think. What if the business – as the tenant – pays for things the fund should pay for? That would be a problem. Or even having the members do things like major work on the property that the fund doesn’t pay for can be a problem.

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