![\"\"](\"https:\/\/acctweb.com.au\/images\/a-tax-calcs-3.jpg\")
<\/p>\nThere are three misconceptions among business owners with SMSF commercial property, a finance expert said<\/p>\n
<\/p>\n
.<\/p>\n
Nadine Connell, co-founder of Smart Business Plans, told SMSF Adviser that most common by a wide margin is that clients believe their SMSF will be under the $3 million threshold and believe they are safe from any tax impact.<\/p>\n
She added the other two misconceptions are that the cost-base election will take care of it and that SMSF borrowing was almost banned.<\/p>\n
\u201cThe \u2018I\u2019m under $3 million so I don\u2019t need to do anything\u2019 response is the most common,\u201d she said.<\/p>\n
\u201cBut the TSB calculation routinely misses industry super from earlier employment, or doesn\u2019t account for what a planned commercial property purchase does to their position at the first assessment date.<\/p>\n
\u201cIn regard to the cost base election response, clients assume it\u2019s automatic when it\u2019s not. It\u2019s a decision the trustees have to actively make. What they\u2019re often missing is the valuation behind it which has to reflect conditions at 30 June 2026, and commercial valuations are already running four to six weeks in some areas.<\/p>\n
\u201cFinally, with the belief that SMSF borrowing was almost banned a meaningful number of clients paused plans through 2025 on that belief. The Treasurer ruled it out, but the decision hasn\u2019t been revisited.\u201d<\/p>\n
Connell said confusion is becoming more apparent as the deadline for the start of the new legislation gets closer.<\/p>\n
\u201cHowever, the clients you should worry most about aren\u2019t the confused ones. They\u2019re the quiet ones. They\u2019ve read a headline, done a back-of-envelope calculation, and filed the issue away,\u201d she said.<\/p>\n
\u201cThose are the clients making decisions now, or deliberately not making them, based on an incomplete picture. From an adviser perspective, those are the clients least likely to call you between now and 30 June.\u201d<\/p>\n
She continued that for clients approaching $3 million, the backwards calculation method can be used whereby you start with the target property price, work out likely market rent, calculate loan repayments, identify the gap.<\/p>\n
\u201cThat gap is what needs to be closed with voluntary contributions, planned against the caps and documented. If the gap is too big for the caps, the property target comes down or the structure gets rethought,\u201d she said.<\/p>\n
\u201cThe discipline matters for Div 296 reasons, too. The bigger the contributions needed to make a property work, the faster the fund\u2019s balance grows, and the sooner the $3 million threshold becomes their problem.<\/p>\n
Connell said for clients already above the thresholds of $3 million and $10 million, the strategies shift.<\/p>\n
\u201cI see spouse balance splitting and re-contribution come up in conversations with their accountant. From our side, the question is liquidity. Does the fund have the cash flow to meet whatever assessment comes, without having to sell a property to fund it. That has to be planned in, not figured out when the bill arrives,\u201d she said.<\/p>\n
Although the decision whether to use the cost-base reset election sits with the accountant and the trustees, Connell said the timing of doing that is of importance.<\/p>\n
\u201cWhatever they decide, they need a 30 June 2026 valuation, and commercial valuation lead times can be up to six weeks in some areas of our network. The mistake we see is clients waiting for the accountant to tell them what to do, when by then the valuer\u2019s booked out,\u201d she said.<\/p>\n
\u201cGet the valuation commissioned now, then let the accountant run the numbers when they\u2019re ready. The valuation is the ingredient, so don\u2019t run out of it while you\u2019re deciding on the recipe.\u201d<\/p>\n
Despite the threat of a large Div 296 bill, property owners aren\u2019t getting rid of real estate from their SMSF portfolios, Connell said.<\/p>\n
\u201cIf anything, it\u2019s the opposite. Clients are directing their next investment toward commercial property in an SMSF rather than residential outside super. I think this trend will accelerate if the CGT and negative gearing changes expected in the upcoming May federal budget come to fruition,\u201d she said.<\/p>\n
\u201cThe structure still stacks up for balances comfortably under $3 million, and for business owners buying their own premises the fundamentals haven\u2019t changed.\u201d<\/p>\n
In the lead up to the start of Div 296 legislation coming into force, Connell said advisers should be doing three things.<\/p>\n
\u201cExplain what\u2019s actually in the final law, because a lot of client framing is still stuck on the 2023 version,\u201d she said.<\/p>\n
\u201cThen flag the 2026-27 liquidity question: clients with property-heavy SMSFs need cash flow inside the fund to meet a possible Div 296 assessment, on top of normal expenses. That\u2019s planning, not improvising on the day.<\/p>\n
\u201cAnd finally, reach out to the clients least likely to call you. The ones who\u2019ve gone quiet since March because, from their perspective, they\u2019ve already worked it out. Those are the ones who haven\u2019t.\u201d<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
by Keeli Cambourne
\nApril 27, 2026
\nsmsfadviser.com<\/p>\n
There are three misconceptions among business owners with SMSF commercial property, a finance expert said<\/p>\n","protected":false},"author":1,"featured_media":2445,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[4],"tags":[],"_links":{"self":[{"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/posts\/2444"}],"collection":[{"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/comments?post=2444"}],"version-history":[{"count":1,"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/posts\/2444\/revisions"}],"predecessor-version":[{"id":2446,"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/posts\/2444\/revisions\/2446"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/media\/2445"}],"wp:attachment":[{"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/media?parent=2444"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/categories?post=2444"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/actinvest.com.au\/index.php\/wp-json\/wp\/v2\/tags?post=2444"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}