Have Your Business Pay Rent to Your Own Super Fund. 100% Tax Compliant
As an Australian business owner, your superannuation shouldn't just sit in a retail industry fund earning generic stock market returns while you pay thousands of dollars in commercial rent to a third-party landlord every month.
Under Australian superannuation law (Section 67A of the SIS Act 1993), you can establish a Self-Managed Super Fund (SMSF) and use a Limited Recourse Borrowing Arrangement (LRBA) to purchase 'Business Real Property'—such as an industrial factory unit, trade shed, or commercial yard.
Your operating business then leases the premises from your SMSF, paying tax-deductible commercial rent directly into your super fund. Rental income inside an SMSF is taxed at just 15% (and 0% once in retirement pension phase), with zero personal liability against your family home.
Our strategy: We coordinate with your SMSF accountant to structure LRBA commercial borrowing up to 70% to 75% LVR with leading specialist wholesale lenders. You can verify your borrowing capacity via the National Loan Matcher.
How It Works (Takes 2 Minutes)
1. Why 80% of "Bank Pre-Approvals" Fail Under the Auction Hammer
Most Australian property buyers believe that an email stating "You're Pre-Approved for $1,200,000" means the bank has guaranteed their funds. In the retail banking industry, this is known as an Automated Approval in Principle (AIP).
An algorithm verified that your self-declared income matches basic credit scorecard matrices. No human credit assessor has reviewed your payslips, verified your HECS/HELP debt, or inspected the property's zoning overlay.
Wholesale Borrowing Capacity & Add-Back Simulator
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| Feature | Traditional Commercial Purchase | SMSF LRBA Purchase |
|---|---|---|
| Funding Source | Personal Cash / Home Equity | Existing Superannuation Balance |
| Rental Income Tax Rate | Individual Marginal Rate (up to 47%) | 15% (0% in Pension Phase) |
| Capital Gains Tax Rate | Up to 24.5% (after discount) | 10% (0% in Pension Phase) |
| Asset Protection | Exposed to Business Creditors | 🛡️ 100% Protected inside Super |
1. How Section 67A SIS Act Rules Work for Tradies
Australian superannuation rules strictly prohibit SMSFs from buying residential property from related parties. However, an explicit statutory exemption exists for Business Real Property.
A self-employed tradie's SMSF can legally purchase an industrial shed or warehouse and lease it directly to the member's operating trade business, provided the lease is at standard market arm's-length terms.
2. SMSF Deposit & LVR Borrowing Parameters
SMSF commercial property loans typically require:
- 25% to 30% Deposit: Sourced from rollover balances from existing super accounts.
- 70% to 75% Max LVR: Borrowed from specialist SMSF commercial lenders.
- Liquidity Buffer: Typically 5% to 10% in liquid cash remaining inside the SMSF post-settlement.
3. Servicing the Loan via Lease Rent and Contributions
Mortgage servicing is calculated by combining market rent paid by your business with ongoing statutory employer super contributions made by fund members.
Verified Mortgage Specialists
Accredited credit representatives independently verified against the ASIC Professional Register. Governed by statutory Best Interests Duty (BID) with direct wholesale lender desk access.
David Chi Tran
Emerge Finance
Frequently Asked Questions: Buying a Tradie Workshop in an SMSF: LRBA Borrowing Guide
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"We have an auction this Saturday in Paddington with an online pre-approval from CBA for $1.4M. Our conveyancer warned us that Section 66W waives all cooling-off rights. If the hammer falls at $1.38M, what happens if the bank valuer down-values the property on Monday?"
"Under Victoria's Sale of Land Act Section 31, we know auction sales waive the 3-day cooling-off period. Does this also apply if the property passes in and we negotiate a private contract in the auction room 20 minutes later?"