Scenario:

• Laura, a 35 year old nurse, has recently started her own practice renting rooms in a medical centre on the grounds of a major hospital.
• Her landlord has decided to sell the suite for $350,000.
• She cannot afford to buy her suite.
• She has few other assets, although she and her husband both make very good money.
• They have a $190,000 in a retail master trust super fund and $40,000 in savings.
• The couple roll their super into a SMSF and make use of their savings to make deductible super contributions ($18,680 each).
• They use the super (now worth $226,000) to invest in the suite using her SMSF.

Facts:

• SMSF lends their super fund $245,000 (being 70% of $350,000).
• Their SMSF pays the balance including all the usual transaction costs including stamp duty.
• The practice continues to pay the same (market) rent as it did before.
• The rent is now helping fund their retirement.
• All future gains in the value of the property are concessionally taxed.
• Laura no longer has to worry about being unable to renew her lease.