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SMSF Loans Australia

Buying investment property inside your self-managed super fund is one of the most powerful wealth strategies available to Australians, but the lending is genuinely complex. We work with a specialist panel who do this properly.

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What you need to know

How SMSF property loans work

When an SMSF borrows money to purchase an investment property, it uses a structure called a Limited Recourse Borrowing Arrangement (LRBA). The property is held in a bare trust (custodian trust) until the loan is fully repaid, at which point the SMSF trustee takes full ownership.

The "limited recourse" part is important, if the SMSF defaults on the loan, the lender can only take the specific asset (the property), not the rest of the fund's assets. This protects the superannuation balance of the members.

The key rules to understand

  • The property must meet the "sole purpose test", it must be held to provide retirement benefits
  • The SMSF cannot purchase residential property from a related party (you can't buy your own home into your SMSF)
  • Business real property (commercial) CAN be purchased from a related party, making this popular for business owners
  • The property cannot be significantly improved while under the LRBA
  • The fund must have sufficient liquidity to meet member obligations beyond the loan repayments
SMSF lending requires an SMSF specialist
This is not a standard home loan. You'll need an SMSF solicitor to set up the bare trust structure, an SMSF accountant, and a broker who understands SMSF policy. The legal and accounting costs are typically $2,000–$5,000 to set up the structure correctly. We coordinate this process with you.

Typical SMSF loan requirements

  • SMSF must have a minimum balance (typically $150K–$200K depending on the lender)
  • LVR maximum of 70–80% (residential), 65–70% (commercial)
  • Bare trust / custodian trust established by a solicitor
  • SMSF registered with the ATO
  • Audited financial statements (at least one year)
  • Serviceability: loan repayments must be covered by rental income + contributions

Business owners: buying your business premises

One of the most compelling uses of an SMSF loan is for business owners to purchase their own commercial premises inside the SMSF, then lease it back to their business at market rent. The SMSF receives commercial rent, builds equity, and eventually the property is owned outright within the super fund, potentially growing tax-free in the pension phase.

This is a popular strategy but requires careful structuring. We work with your accountant and solicitor to make sure it's set up correctly from the start.

Is an SMSF property loan right for you?
The first step is a conversation about your fund balance, your goals, and whether the numbers actually stack up. There's no obligation.
Get your real numbers Call 0422 101 112
We work alongside your SMSF accountant and solicitor. We handle the lending; they handle the legal and compliance side. The whole team moves together.
FAQ

SMSF loan questions

Yes, but with restrictions. The property must be a genuine investment (not used personally by fund members or related parties), must meet the sole purpose test, and cannot be purchased from a related party. Standard residential investment property (rented to unrelated tenants) is fine.
Setting up the bare trust / custodian trust structure typically costs $1,500–$3,000 in legal fees, plus stamp duty on the bare trust deed in some states. Ongoing SMSF compliance (accounting and audit) typically runs $2,000–$4,000 per year. These costs need to be weighed against the investment strategy.
Fewer than you'd think. Many of the major banks have exited SMSF lending, leaving specialist lenders, non-banks and some credit unions. The rates tend to be higher than standard investment loans. We work with the lenders who offer this product and have competitive rates.
Once the loan is repaid, the property in the bare trust is transferred to the SMSF trustee. The SMSF then owns it outright. If the fund members are in the pension phase, any income from the property (rent) and capital gains on sale may be tax-free.
SMSF lending specialists

Let's see if this strategy
works for your fund.

SMSF property lending only makes sense when the numbers actually stack up. We'll give you an honest assessment before you commit to anything.

Get your real numbers Call 0422 101 112