Self-Managed Superannuation Fund Commercial Property Related Party Lease Agreements
A common strategy for SMSFs is to invest in commercial property and have your business lease the premises. To stay compliant the arrangement needs to be on arm’s length terms (this simply means that the terms and conditions of the transaction must be the same as they would have been had the parties not been related).
If the terms on the lease state that the rental income should be increased with Consumer Price Index (CPI), then rent should be appropriately increased.
The Australian Bureau of Statistics has recently released the June Quarter 2023 CPI data.
For example, the below table shows an increase for Perth in the June 2022 to June 2023 Quarter of 4.9%. This increase therefore may need to be applied to the commercial rent of a related party lease agreement.
If you have any queries or would like assistance about the CPI rent review, please contact Gemma Woolley on (08) 9321 2111 or email gemma@shakes.com.au.
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