Can my SMSF buy my investment property?
A failure to understand property investment rules for SMSFs can have nasty consequences, especially if the property is acquired from a fund member or related party. In some circumstances, getting it wrong could mean a year’s room and board in Her Majesty’s finest!
Many SMSF trustees such as architects and doctors want to place their commercial properties into their SMSF and then rent the property from the fund, so it’s important to know the rules.
There are three critical aspects in determining whether an SMSF can buy an investment property from a member or related party:
Does the property meet the ‘business real property’ (BRP) definition?
Does the acquisition meet the fund’s investment strategy?
Does the asset meet the sole purpose test?
This article will focus on the BRP definition.