subscribe to our newsletter

Small business SMSF property investment on the up

03 May 2016 — 1 minute read

One business adviser has seen an uptick in SME owners investing in commercial property via their SMSF, amidst concerns of a glut of small businesses to soon flood the seller’s market.

“There’s going to be a lot of businesses for sale out there,” Tony Kabrovski, a partner at chartered accounting and business advisory firm HLB Mann Judd, told a gathering of SME owners in Sydney.

“What is that going to do to the value of your retirement asset?”


Mr Kabrovski quoted recent statistics from the Australian Family and Private Business Survey that showed the average age of Australian SME owners is 56 years, with 20 per cent aged over 65 and 11 per cent aged over 70.

The figures also suggest that close to half (44 per cent) of Australia's SME owners plan to sell their businesses within the next decade.

According to Mr Kabrovski, this potentially poses a significant risk for business owners who view their company as their primary retirement asset.

“I think what's going to happen is there is going to be disappointment with expectations with family businesses. Family businesses put blood, sweat and tears into their business with a view that that will be the goose that lays the golden egg and provides that retirement fund they've been aiming for,” he told SMSF Adviser's sister publication My Business.

“Then a lot of business owners are going to find themselves in a situation where they are not going to be able to fund their own retirement, and they may then hold on for a lot longer to their business. That will have a downward trend on valuation because a lot of the time with businesses, if your heart [isn't in it] and you're not passionate about your business, then that usually comes through in the numbers.”

Mr Kabrovski said he is seeing an increase SME owners transferring ownership of their commercial property to their SMSF – a strategy that boosts their retirement income prospects.

“We've seen with a lot of family businesses that the property values go up quite consistently, and that then effectively becomes the retirement fund for a number of our clients, and a retirement fund in the sense that it will continue to receive reasonable yields with rental payments,” he said.

Read more:

Big changes to hit super today, tips big four firm

Mid-tier head scores global role

International player forecasts big returns on precious metals

Small business SMSF property investment on the up
smsf logo
smsfadviser logo

Are you up to date with the legislative changes from 1 July? Contribution cap increases, super guarantees, age increases, SG rate increases. The budget announcement changes. Don’t be caught off guard by your clients’ questions. Prepare for any scenario with the SMSF Foundations course. 21 CPD hours available. Learn more

Arm yourself with the critical information that you need to ensure you and your clients continue to thrive in today’s changing environment at the free-to-stream SMSF Adviser Technical Strategy Day. Live streamed directly to you in October over three days, this event is jam-packed with expert-led sessions to arm you for success by providing the latest updates on regulatory and legislative changes impacting SMSFs. Secure your free spot today, visit www.smsfstrategyday.com.au

join the discussion

Latest poll

Do you have clients that are aged 65 or 66 planning to trigger the bring forward rules?


Get the latest news and opinions delivered to your inbox each morning

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.