The 2026-27 Federal Budget, Part 6: Buying Your Business Premises Through the Right Structure and One of the Smartest Long Term Moves Business Owners Can Make
- Zac Hayes
- May 30
- 6 min read
One of the biggest missed opportunities for many business owners is this:
They spend years paying rent for their business premises, but never actually own the property themselves.
Every month, the business pays rent.
But instead of that money helping build their own long-term wealth, it helps fund someone else's retirement.
Over 10, 20, or 30 years, that can mean hundreds of thousands, or even millions, of dollars leaving the family group.
And after the 2026 Federal Budget changes, understanding the right structure to own business property has become even more important.
A note on timing: several of the Budget measures mentioned in this article are announced and not yet law. They are subject to legislation passing Parliament and the final design may change.
The Core Idea Is Actually Very Simple
If your business already needs commercial premises to operate, there may be an opportunity for a separate structure connected to you or your family to own that property instead.
The business still pays rent.
But instead of paying a third-party landlord, the rent may flow into a structure that helps build your own wealth over time.
In simple terms:
• The business pays rent
• The rent becomes income for your own structure
• The property may increase in value over time
• Long term wealth is created for the family
For many business owners, this becomes one of the biggest wealth building strategies available to them.
What Changed After the 2026 Budget?
The Budget announced major changes around:
• Trust taxation
• Capital gains tax
• Investment income structures
But importantly:
SMSFs were largely left alone.
That means SMSFs have become even more attractive in many situations for holding commercial property.
Especially where the property is used by your own business.
The Two Main Options Business Owners Usually Consider
When buying commercial premises, most business owners generally look at two common options:
• Buying through a trust structure
• Buying through an SMSF
Each option has pros and cons.
And the right answer depends on your business, goals, borrowing position, retirement plans, and long-term strategy.
Option 1: Buying Through a Trust
A trust structure can own commercial property and lease it to your business.
This approach can still provide benefits such as:
• Asset protection
• Flexibility
• Separation between the business and the property
• Access to some small business CGT concessions in certain situations
But after the proposed Budget changes, trusts are likely to become less tax effective in some areas.
From 1 July 2028, discretionary trusts are expected to pay a minimum 30% tax on the trust's taxable income at the trustee level, with non-corporate beneficiaries receiving non-refundable credits for the tax already paid.
That means rental income inside trust structures may no longer be as efficient as it once was.
Option 2: Buying Through an SMSF
This is the option becoming far more attractive after the Budget announcements.
An SMSF can purchase commercial property and lease it back to your business under strict rules.
This is completely legal when structured correctly.
And importantly, the tax rules for SMSFs largely stayed the same after the Budget.
For many business owners, this can create significant long term advantages.
Why SMSFs Are Becoming More Attractive
Inside an SMSF:
• Rental income is generally taxed at 15%
• In retirement phase, rental income supporting a pension can potentially become tax free
• Capital gains can receive very concessional tax treatment
• SMSFs were excluded from the proposed trust tax rules
That means the gap between SMSFs and trusts is likely to widen further as the Budget measures are legislated.
Buying business premises through the right structure is one of the highest-impact decisions many business owners ever make. The Budget changes have shifted which option may now work best for your situation.
The Business and Wealth Collective's EOFY Strategy Session can help you review your current ownership position, your structures, and whether commercial property planning should form part of your next move.
The "Be Your Own Landlord" Strategy
This is the concept many business owners understand immediately.
Imagine your business currently pays:
• $80,000 per year in commercial rent
Right now, that money probably goes to another property owner.
But if the property is owned by your SMSF or another structure connected to your family:
• Your business still claims the rent as a business expense
• But the rental income now helps build your own long term wealth
In simple terms:
You stop helping fund someone else's retirement and start helping fund your own.
A Simple Example
Let's say:
• Your business rents a warehouse for $80,000 per year
• Your SMSF purchases the warehouse
• The business pays rent to the SMSF
Now:
• The business still receives the tax deduction
• The SMSF receives the rental income
• The property may grow in value over time
• The rent helps build retirement wealth for your family
Over 15 or 20 years, this can become incredibly powerful.
Especially if the property eventually becomes debt free inside the super environment.
Why Structure Matters So Much
One of the biggest mistakes business owners make is mixing everything together.
For example:
• Running the business personally
• Owning property personally
• Holding all wealth in one area
That can create major problems around:
• Tax
• Asset protection
• Risk
• Retirement planning
• Succession planning
Good structures create separation.
The business runs the operations.
The property structure holds the asset.
Your long term wealth builds separately over time.
That separation can become extremely important if something ever goes wrong in the
business.
The Long-Term Goal
The real goal is not simply buying property.
The goal is creating long term financial security.
Over time, the ideal situation for many business owners looks something like this:
• The business becomes profitable
• The property is gradually paid down
• Rental income continues flowing into the structure
• The property grows in value
• Retirement wealth builds steadily over decades
Eventually, many business owners reach a point where:
• The business may be sold
• The property is still owned
• Rental income continues
• Wealth remains inside the family group
That is where the real power of the strategy often appears.
Important Things to Get Right
This strategy can be incredibly effective.
But it must be structured properly.
Some of the key areas that need careful planning include:
• Correct ownership structures
• Proper lease agreements
• Market rent requirements
• Lending structures
• SMSF compliance rules
• State stamp duty considerations when moving existing property
• Exit planning
• Tax planning
• Asset protection
Trying to set this up cheaply or without proper advice can create expensive mistakes later.
When This Strategy May Be Worth Exploring
You may want to review this strategy if:
• Your business rents commercial premises
• You are paying significant annual rent
• Your business is stable and growing
• You are building long term wealth
• You are thinking about retirement planning
• You want stronger asset protection
• You are considering an SMSF
• You want more control over your long-term financial future
If you are unsure whether buying commercial property through an SMSF or trust structure makes sense for your situation, now is the right time to review it properly before EOFY decisions are made.
Reserve your EOFY Strategy Session with The Business and Wealth Collective.
Final Thoughts
The 2026 Budget announced many changes to tax rules around trusts and investments.
But the importance of owning quality assets through the right structure has not changed.
If anything, good structuring has become even more important.
The business owners who usually create lasting wealth are not simply focused on reducing tax this year.
They are focused on:
• Long term ownership
• Asset protection
• Cash flow
• Retirement planning
• Building wealth that lasts decades
And for many business owners, owning the premises through the right structure becomes one of the most important parts of that journey.
Review Your Property and Structure Strategy Before EOFY
Every business owner's situation is different. The right structure depends on your business, borrowing position, retirement goals, tax position and long-term plans.
Reserve your EOFY Strategy Session with The Business and Wealth Collective.
General Information Disclaimer
This article provides general information only and does not take into account your personal circumstances, objectives, financial situation, tax position or legal structure. It is not personal tax, financial, legal or investment advice.
The Federal Budget measures discussed in this article were announced on 12 May 2026 and many require legislation, regulations, ATO guidance or further program detail before they take effect. The final rules, eligibility criteria, thresholds, timing and practical outcomes may change.
Before making decisions about tax, superannuation, property, trusts, business structures, investments, asset sales or contributions, you should obtain advice based on your specific circumstances.
The Business & Wealth Collective can help you review your position and identify which areas may require further advice before EOFY.
Tax agent services within The Business & Wealth Collective are provided by Configured Business Solutions Pty Ltd (Tax Agent No. 26109304).
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