If it’s owned by your self-managed super fund, borrowings can’t finance this. But there are other options.
A curiosity in the borrowing rules for self-managed superannuation funds is that while the fund can borrow to acquire a property, it can’t borrow to carry out renovations. If the fund’s cash is insufficient, how else can renovations be financed?
Whether the premises are bought on the market or from the member, what happens when those business premises need to be renovated?What if the tenant carries out the renovations? The tenant is not under the restrictions of the fund and might provide the perfect workaround for the problem. So if it’s the tenant driving the renovations, then a market value of the renovated premises would normally increase the rent, although the fund/landlord should concede something given the benefit it receives from the new work. On the other hand, if it’s the fund pushing for the work, then the tenant will no doubt want rent reductions to compensate.
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