Can an SMSF loan buy a shop with a flat above it? Corner shop with a flat upstairs
Fails. One room is a home.
3 of 4 rooms count as business
The shop is all business. The flat upstairs is somebody’s home, and both sit on one title.
Room by room
- Shop windowBusiness
- Shop floorBusiness
- Back storeBusiness
- Flat upstairsLived in
- New SMSF loan
- Not allowed: the flat is a home
- Cash
- Allowed, on the usual SMSF rules
Why
Business real property means land and buildings used wholly and exclusively in a business. The test looks at the whole property on its title, not only the ground floor.
A flat someone lives in is more than a minor or trifling private use, so the property as a whole doesn’t qualify. From 10 August 2026, a new SMSF loan can’t buy it.
What you can do
- Ask whether the shop and the flat are on separate titles. A shop on its own title is judged on its own use, and it would need its own loan.
- Buy it without a loan, on the usual SMSF rules. Nobody related to the fund can live in the flat or rent it.
- Exchanged contracts before 10 August 2026? The old rules apply, even if settlement is later.
