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Apr 04, 2024

Rural Property Leasing Shed

in SMSF Technical Forum

Hi,

I have a client wanting to setup a SMSF and purchase a property.

They are thinking of purchasing a house on a few acres (4-5) and a large shed exists on the property.

Their idea is to fence off the shed and the area that they require and utilising it to operate their plumbing business, then rent the house and remaining paddocks out to a tenant.

They will pay rent at market value from the business to the SMSF.

The property will be similar to: https://www.domain.com.au/380-brownes-road-anakie-vic-3213-2019131629

Will this meet the business real property requirements?

My thoughts are if the remaining paddocks are used for primary production then it may be OK but if not then the property is not being used wholly and exclusively for commercial purposes and it may not be allowable to cordon of a portion for business use? But I could be wrong there!

3 comments

Comments (3)

Eric Taylor

Apr 11, 2024

My first question is from whom is the property being purchased? If the purchase is not from a related person or entity, I see no issue. Not business real property, but not an issue.