Frequently asked questions

What is an SMSF property loan?

It’s a loan taken out by your Self-Managed Super Fund (SMSF) to purchase an investment property. The loan is structured under a Limited Recourse Borrowing Arrangement (LRBA), which limits the lender’s recourse to the property itself.

Can I buy property as a single member or with a partner?

Yes. Your SMSF can have up to 6 members (often a couple or family members). All members’ super balances can be pooled in the SMSF to help with the purchase. The property is owned by the SMSF, not by you personally, and rental income/profit stays in the fund.

How much deposit or savings does my SMSF need?

Generally, 20%–30% of the property value as a deposit. Plus enough in super to cover stamp duty, legal costs, loan setup fees, and a liquidity buffer (often at least 10% of the SMSF’s total assets after purchase). For example, buying a $500,000 property may require $150,000–$180,000 in your SMSF, depending on lender requirements.

What type of properties can my SMSF buy?

Allowed: Residential or commercial investment properties.
Not allowed: Your own home, a property you or related parties live in, or a holiday home you use personally.
Commercial properties can be leased to your own business at market rent under strict rules.

Do I need an established SMSF, or can I set up a new one?

You can do either: Established SMSF: Can proceed to purchase immediately if it meets compliance and liquidity requirements, or new SMSF: Needs to be set up, have a bank account, and receive contributions/rollovers before you can apply for a loan. This setup usually takes 4–6 weeks.

What are the typical loan terms and interest rates?

Loan-to-Value Ratio (LVR): Usually max 70–80% of property value. Loan terms: Often 15–30 years. Interest rates: Typically higher than standard home loans due to the specialised structure.

Can I improve or develop the property?

Basic repairs and maintenance are fine. Major renovations or developments (that change the nature of the asset) cannot be funded with the SMSF loan — they must be paid from available cash in the fund.

What ongoing costs should I expect?

SMSF annual audit & compliance costs, Property management fees, Loan interest and fees, Insurance and maintenance

What are the benefits of buying property through an SMSF?

Potential tax advantages: 15% tax on rental income, 0% capital gains tax in pension phase (conditions apply). Asset protection — the property is owned by the SMSF, separate from your personal assets. Allows pooling of members’ super balances for larger investments.

Can my SMSF buy an established property or a new property?

Yes, your SMSF can purchase either an established property or a newly built property, provided it meets the investment strategy and sole purpose test. However, SMSFs generally cannot buy vacant land to build on using borrowed funds — the property must be a single, completed asset at the time of purchase.

Is there a minimum amount I need in my super to buy property through an SMSF?

While there’s no official legal minimum, in practice most lenders require your SMSF to have at least $150,000–$200,000 in combined member balances before they’ll consider lending. This ensures there’s enough for the deposit (usually 20–30% of the property price), stamp duty, legal costs, and loan buffers — while still keeping funds aside for other investments and ongoing expenses.