Question: We are considering purchasing a farm on which we would live (residential area less than two hectares) and would require 10% of the purchase price to be funded by our SMSF and 90% by ourselves (part cash and part debt). We would pay rent to our SMSF at market rates for the 10% of the land. Would this be allowable? We will be running a primary production business as recognised by the ATO.
Answer: Thanks for the question.
As you're running a genuine business then it would seem that the super fund would own business real property, which it can lease to a related party.