It is important you understand the rules relating to SMSF and real property.

Firstly, the trustee must ensure that sole purpose test is met. Meaning that the property is for retirement purpose only, meaning you and your relatives cannot live in the property.

Residential property

• Cannot be acquired from member or related parties
• Cannot be rent to members or related parties

Commercial property that is used solely for commercial purposes,

• can be purchased from member or related parties as arm’s length transaction (market value)
• can be leased to members or related parties at market value

Things to be noted:

• market appraisal should be conducted when there’s significant variation in market value
• auditor might request annual review on the market value of the real property