Can an SMSF loan buy a shop leased to a tenant? Bakery cafe leased to a tenant
Passes. Every room is business.
2 of 2 rooms count as business
A stranger’s bakery fills every room. The fund collects the rent.
Room by room
- Shopfront and tablesBusiness
- Counter and bakery kitchenBusiness
- New SMSF loan
- Allowed, from any lender
- Cash
- Allowed
Why
Business real property can be used in anyone’s business. A cafe leased to an unrelated tenant, with no one living there, is used wholly and exclusively in a business.
It has to stay that way for as long as the loan runs. A flat added out the back would change the answer.
What you can do
- A new SMSF loan can buy it, whether the lender is a bank, a non-bank lender or a related party.
- Keep the lease on commercial terms, at market rent.
