An SMSF may generally invest in rural property, providing it meets the fund’s investment strategy, and considerations such as liquidity, diversification and cashflow are all fulfilled. The purchase also needs to meet the sole-purpose test of providing retirement benefits for its members, or benefits to their dependants if a member dies before retirement.
Additionally, rural property used in a primary production business will satisfy the definition of business real property even if not all the property is being used for commercial purposes.
This means an SMSF can buy a rural property from a related party at market value, even if a member, or another related party of the fund, lives on the property. It also means that once the SMSF has acquired the property, it can be leased to a related party of the fund at market rates without breaching the rules.
This concession applies as long as the area of the property being used for domestic or private purposes is no larger than two hectares and the property is not being used predominantly for domestic or private use.
We recommend that you speak with a financial adviser to help you decide if buying property through your super fund is right for you.
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It’s important to consider your particular circumstances and read the relevant Product Disclosure Statement or Terms and Conditions before deciding what’s right for you. This information hasn’t taken your circumstances into account.
This information is provided by AMP Life Limited. Read our Financial Services Guide for information about our services, including the fees and other benefits that AMP companies and their representatives may receive in relation to products and services provided to you. All information on this website is subject to change without notice.