SMSF Finance for Property Investment

There are a growing number of Australians wanting to take control of their investment decisions so that they can achieve financial freedom in retirement.

For many people, utilising a self-managed superannuation fund can be a very tax effective way of investing and offsetting income. While some people prefer to keep their super in traditional super funds, others prefer to put their funds into an investment which they can personally select and manage on a more direct level.

Self-managed superannuation is complicated to set up and maintain. The right setup can make a vast difference in your tax and compliance results. It’s essential to get advice and we can recommend some expert SMSF tax specialists to help you achieve the best results.

If you have $200,000 or more invested in superannuation, you should consider the potential benefits of a self-managed super fund (SMSF). Using your super to buy property gives you access to some of the best tax incentives for investing in property.

Why Invest in Property through a SMSF?

  1. Greater control over your superannuation assets
    2. Attractive concessional tax structure
    3. Using your superannuation as a deposit to purchase property
    4. If the rental income and your compulsory superannuation guarantee covers the property expenses then this strategy should not impact your personal cash flow

How the SMSF property loan works:

  • Loan to value ratio can be up to 80% for residential property
  • Interests rates generally are about 1% higher than traditional residential loans
  • Can be used to purchase houses, townhouses and apartments
  • Not applicable for construction loans or to secure vacant land
  • Legal and application costs generally range between $1,500 – $3,000
  •  Servicing is met by using 80% of the rental income + the members’ employers guaranteed super contributions and salary sacrifice
  • Lenders require post settlement liquidity requirements, which means that they are expecting your SMSF to hold a minimum amount of cash or shares after settlement.
  • Require a personal guarantee by the SMSF trustee/s
  • The purchase must be an arms-length purchase – ie. you can’t sell a residential property you already own to your SMSF but may be able to if the property is commercial


SMSF Property Investing can be a great strategy if done effectively. If you are considering this strategy make sure you get the right advice upfront.

Belinda (ex- Macquarie Bank) is an accredited Finance Broker and holds a bachelor of Communications (minor in Business). She has accumulated over 10 years of banking and lending experience across credit, sales and senior manager roles. Belinda combines her passions of finance, business, property and people to provide an enriched client experience and takes the time to investigate and understand what is required for each of her clients.
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