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Buying your business premises through your SMSF: the rent-to-yourself play

One of the most popular strategies in self-managed super is deceptively simple. Your self-managed super fund (SMSF) buys the premises your business operates from, and your business pays rent to the fund instead of to an outside landlord. The money you were already paying in rent now builds your own retirement savings.

It is often called the rent-to-yourself play, and for a business owner who leases their premises it can change the maths considerably.

If you own your premises or plan to, our team can finance your business premises inside your SMSF.

How the rent-to-yourself strategy works

The fund holds the property as business real property and leases it to your business under a normal commercial lease at market rent. The rent is a deductible expense for the business, and it lands in the fund, where it is taxed at just 15% while the fund is in accumulation phase, and potentially nil once you are drawing a retirement pension. If the fund borrows to buy, that rent also helps service the loan.

Why business owners use it

The appeal is that it turns an unavoidable cost into an asset you own. Four benefits stand out.

Rent that becomes retirement savings

Instead of enriching a landlord, every rent payment builds equity and income inside your own fund, in a low-tax environment.

Asset protection

Holding the premises in super can help separate the property from the trading risks of the business, since the fund is a distinct legal structure. This is general in nature and depends on your circumstances.

Capital growth taxed lightly

Any growth in the property’s value is taxed at the concessional super rates, with an effective 10% on gains held more than 12 months in accumulation, and potentially nil in pension phase.

Security of tenure

You are the landlord, so you are not exposed to a lease that will not be renewed or a sudden rent hike from an outside owner.

The rules that make it work

The strategy only holds up if it is run properly.

  • The property must be business real property, used wholly and exclusively in a business.
  • The lease must be at genuine market rent, supported by a valuation.
  • The lease and all dealings must be on arm’s length terms.
  • The investment must satisfy the sole purpose test.
  • If the fund borrows, it must use a Limited Recourse Borrowing Arrangement (LRBA).

The costs and cautions

It is not right for everyone, and a few risks deserve attention before you commit.

  • Concentration risk: a single large property can dominate the fund and reduce diversification.
  • Liquidity: the fund still needs cash for repayments, expenses and pension payments.
  • Contribution caps limit how fast you can build the fund, with the concessional cap at $32,500 for 2026-27.
  • Division 296 adds 15% to earnings on the portion of a total super balance above $3 million from 1 July 2026.
  • Market-rent discipline: the rent has to stay at market rates, not be adjusted to suit cash flow.
  • Goods and services tax and land tax may apply and need to be planned for.

Getting the premises into your fund

You can buy new premises through the fund, or transfer premises you already own into it. An existing property can generally move in as an in-specie contribution or a sale at market value, which may trigger CGT and stamp duty, though small business CGT concessions and state duty concessions can soften the cost.

To weigh the tax against owning personally, see our comparison of SMSF versus personal name.

Frequently Asked Questions (FAQs)

Can I really be my own landlord through my SMSF?

Yes, as long as the property is business real property and the lease is at market rent on arm’s length terms. This related-party leasing is specifically allowed for commercial property, unlike residential.

Is the rent tax-deductible for my business?

Rent paid at market rate under a genuine commercial lease is generally deductible to the business, in the same way rent to any landlord would be. Confirm the detail with your accountant.

Does the 2026 borrowing ban affect this strategy?

No. The ban from 10 August 2026 applies only to new borrowing for residential property. Buying your business premises through an SMSF with an LRBA still works exactly as before.

The Bottom Line

The rent-to-yourself strategy lets a business owner redirect rent from an outside landlord into their own retirement savings, taxed at 15% or less, while owning the premises they trade from. It suits owners with a long horizon and calls for discipline on market rent, liquidity and diversification. For the official overview of running a fund, the MoneySmart SMSF guide is a good reference.