Thinking of Buying Your Rooms? A Guide to Purchasing Medical Rooms via SMSF

Self-Managed Superannuation Funds (SMSF) have become an increasingly popular investment vehicle in Australia, offering individuals, particularly medical professionals, greater control over their retirement savings. For doctors, dentists, and healthcare specialists, purchasing medical suites through an SMSF presents a strategic opportunity to secure a long-term practice location or create a steady source of passive income. This blog outlines the key benefits and considerations of acquiring medical rooms using an SMSF, focusing on practical applications for those working in or investing in the healthcare sector. 

Why Consider Buying Medical Suites Through an SMSF? 

Medical professionals often seek greater autonomy and long-term financial stability.  

Owning your consulting rooms via an SMSF allows you to: 

• Establish your practice on premises you control 

• Create wealth through rental income by leasing rooms to other practitioners 

• Benefit from the tax efficiencies associated with superannuation investments 

This dual advantage—practising from your suite or renting to others—makes this strategy particularly appealing for those looking to grow their retirement fund while staying aligned with the healthcare industry. 

Rental Income and Passive Wealth Creation 

Medical rooms attract long-term tenants due to the ongoing need for stable, purpose-built premises. By purchasing a suite through your SMSF and leasing it to other medical practitioners, you can generate consistent rental income within the fund. This income is typically taxed at the concessional rate of 15%, boosting your after-tax returns. 

For those who plan to use the premises personally, leasing them to your practice (under strict SMSF guidelines and at market rates) ensures rental payments are retained within your retirement structure rather than paid to an external landlord. 

Capital Growth and Long-Term Security 

Medical tenancies are resilient and reliable, often in prime commercial locations near hospitals or specialist hubs. Demand for such properties is driven by healthcare growth, population ageing, and increased investment in health infrastructure. 

Over time, well-positioned medical suites appreciate in value, enhancing the SMSF’s asset base. This makes this a solid long-term addition to a diversified retirement portfolio, providing income and capital growth potential. 

Tax Benefits and Structural Advantages 

Using an SMSF to acquire property offers unique tax advantages: 

• Rental income is taxed at 15% (concessional super rate) 

• Capital gains on assets held longer than 12 months are taxed at an effective rate of 10% 

• Deductible expenses include loan interest, property management, and maintenance 

These savings can meaningfully accelerate wealth creation within your SMSF. 

However, strict compliance is required: 

• The property must pass the sole purpose test (to provide retirement benefits) 

• If you lease the property to your own business, it must be at market value 

• Limited Recourse Borrowing Arrangements (LRBAs) must be correctly structured if funding is required 

Professional guidance is essential to navigate these rules and ensure you’re operating within ATO compliance frameworks. 

Key Considerations Before You Invest 

While the benefits are compelling, you must: 

• Seek tailored financial advice to confirm suitability for your circumstances 

• Understand cash flow implications if leasing to your practice 

• Perform due diligence on the location, tenancy demand, and fit-out requirements 

Purchasing medical rooms through an SMSF is not a short-term strategy—it is designed to enhance your retirement outcomes over time while aligning your investment with your professional footprint. 

Is This Path Right for You? 

Whether you want to own your consulting rooms or create a healthcare-aligned passive income stream, acquiring medical property through your SMSF could be a strategic move. It offers control, stability, and significant tax advantages—but only when done right. 

At AstuteMed, we work with financial and legal advisers to help healthcare professionals make smart investment decisions tailored to their clinical and financial goals. We offer practical, compliant advice on SMSF property acquisition and ongoing tax planning to help you achieve long-term success. 

Let’s Talk 

If you’re considering buying or leasing your rooms to others in the healthcare industry, we’re here to help.  

Visit astutemed.com.au or book a consultation with our team to explore your options further. 

Disclaimer: The information in this blog is general in nature. It does not consider your specific needs or circumstances, so you should consider your financial position, objectives, and requirements and seek financial advice before making any financial decisions.