smsf 4 commercial investment

Discussion in 'Superannuation, SMSF & Personal Insurance' started by bjm__, 1st Nov, 2016.

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  1. bjm__

    bjm__ New Member

    Joined:
    1st Nov, 2016
    Posts:
    1
    Location:
    qld
    Hi,
    have a few question.
    Scenario : Have $300k in smsf,want to purchase commercial land [2 acres] with house on it asking $600k with the intention of creating a live in business on property ie.self storage units.Have a further $350k of personal funds to use towards the development of the property and business.
    1. Is it possible to borrow 50% in a SMSF if I intend to be the tenant.
    2. Am I allowed to develop this property while under finance using my own funds.
    3. Can I create a live in business if I'm paying rent to SMSF.
    4. Is rent set by SMSF owners or median rental for thearea.

    cheers
     
    bjm__, 1st Nov, 2016
    #1
    2 people like this.
  2. Redwood

    Redwood Well-Known Member

    Joined:
    22nd Jun, 2015
    Posts:
    691
    Location:
    Melbourne
    Hi there

    1. Yes - can be up to 70% depending on the lender and their requirements
    2. Maybe
    3. yes if you met BRP test
    4. Rent is set by a commercial arms length valuation by a licensed agent

    Not financial advice and cannot be relied upon

    Cheers Ivan
     
    Redwood, 22nd Nov, 2016
    #2
  3. SMSFCoach

    SMSFCoach Member

    Joined:
    17th Jan, 2017
    Posts:
    14
    Location:
    Castle Hill, Sydney, Australia
    You cannot change the nature of an SMSF asset while it is under a borrowing arrangement. Changing the asset from commercial land to a Self Storage Facility would breach these rules.
     
    SMSFCoach, 17th Jan, 2017
    #3
  4. Simon Hampel

    Simon Hampel Founder Staff Member

    Joined:
    3rd Jun, 2015
    Posts:
    12,412
    Location:
    Sydney
    How does that work? How are the rules actually worded?

    I would have thought that commercial land -> self storage wasn't that much of a big deal ... or is it that it's becoming a business rather than just a commercial property which would increase the risks to the SMSF ?
     
    Simon Hampel, 18th Jan, 2017
    #4
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