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Buy Property With Your Self Managed Super Fund - find out how

With average capital city house prices up 9% in 2013 to more than $539,000, investing in Australian property can seem like an unattainable dream. But did you know that you can use a self-managed super fund (SMSF) to buy property through your super – and potentially boost your retirement savings at the same time?

3 Reasons to consider Property investment With Your Super

1. Diversify into a high growth asset

A key benefit of SMSFs is that they offer a wider range of investment options than traditional super funds – including direct property. By spreading your savings across asset types, you can help reduce risk and create more consistent returns, while still investing for growth.

2. Build a bigger portfolio sooner

 An SMSF can borrow to invest in residential or commercial property, with lenders typically funding up to 70% or 80% of the purchase price. So you can take advantage of low interest rates to build a bigger portfolio now, and potentially earn more income and capital growth in the future. As long as your returns outpace borrowing costs, you’ll come out ahead.

3. Potentially save on tax

SMSFs can use negative gearing to claim a deduction for borrowing expenses, just like individuals.

And investing through an SMSF can have other tax advantages as well. Rental income paid to your SMSF is generally taxed at just 15%. And if you are over 55 and commence a Pension in your SMSF, then the rent you receive is tax free. More importantly after commencing a Pension in your SMSF, any capital gain when you sell the Property is also be tax free!

Need Help With Your Self Managed Super Fund?

Tips and tricks to bear in mind!

While investing in property through your SMSF can be an attractive strategy, there are a range of rules you need to observe, plus some pitfalls for the unwary.

Here are some of the most important:

1. Check your investment strategy. Like any other investment decision, your property purchase needs to conform to your SMSF’s written investment strategy.

2. Use a non-recourse loan. SMSFs can only use a limited recourse loan, when purchasing a Property. So if something goes wrong and the fund defaults, its other assets aren’t at risk.

3. Remember the sole purpose test. Your investment must be for the sole purpose of saving for retirement – which means you can’t use your super to pay off your own home or buy a holiday home, for example.

4. Avoid related party transactions. It’s also against the law to buy, sell or rent a residential property to or from a fund member, trustee or a relation. That means you can’t transfer a residential property you already own into your SMSF, for example.


The rules for commercial property are slightly different, with business owners often choosing to buy premises through an SMSF, then rent them back to the business at commercial rates.


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