Self-Managed Super Fund Property Investment


With a Self-Managed Super Fund (SMSF), you have a greater range and choice of investments than with a managed industry fund. This includes being able to purchase investment property by meeting certain conditions. 

Property purchased through an SMSF can’t be lived in by you, the other trustee or anyone associated with the trustees – regardless of how distant the connection. Many Australians seek a retirement investment strategy with larger control over their finances. In that case, you may want to consider setting up a self managed super fund to buy property to invest your money in the direction you want. An increasingly popular choice for Australians in recent years, SMSFs are often used to buy investment properties.

A self managed super fund also can’t be rented by you, the other trustee or anyone associated with the trustees. In any case, buying a holiday home in your SMSF and living there during the summer isn’t allowed.

Furthermore, you can’t put an existing residential investment property that you’ve got into an SMSF – either by way of the fund purchasing it at market price or contributing within the cap limits. 

A self managed fund can even use borrowed monies to get one asset, or a set of identical assets that have an equivalent market price. Through Limited Recourse Borrowing Arrangements (LRBA), they are driving the recognition of property purchases in SMSFs. This specific method involves the SMSF trustees receiving the beneficial interest within the purchased asset, while the legal ownership is persisted trust. The upside is that, with an LRBA, your whole super fund isn’t in danger if the loan is defaulted. There also are restrictions on the way a debtor can recover their funds.

At High Income Property, we understand that running an SMSF requires knowledge, expertise and time. That’s why we offer you help in setting up and managing your SMSF to buy an investment property. Our specialist team can provide investors with assistance in a variety of ways:

  • Connect you with the specialists who can advise on the setting up an SMSF
  • Work with industry specialists to ensure that you have the appropriate insurance and auditing in place
  • Help you to secure a home loan that meets limited recourse borrowing arrangements (LRBA)
  • Get the best investment loan at the most competitive rate
  • Find a suitable property to invest using super-fund

Looking to Invest in the Property as an Asset Using Super? Talk to us.

    Buying Property with SMSF

    What is Self Managed Super Fund (SMSF)?

    A self managed super fund (SMSF) is a savings account  that provides benefits to its members upon retirement and in which you do-it-yourself, rather than one that’s managed by a superannuation provider.

    One important difference between self managed super funds and other super funds is that SMSF members also are the trustees of the fund. Furthermore, SMSFs can have between one and 6 members. The main advantage is the level of control that the trustees have when it involves tailoring the fund to satisfy their individual needs. 

    Coming back to the ‘do-it-yourself’ super method, this allows you to be more closely involved what you invest in and offers tax benefits that major providers don’t. However, it comes with several responsibilities, as have complete control, and must confirm everything is well-placed and managed correctly. Demanding tons of energy and research, SMSFs aren’t suitable for everybody . Some thrive under the added responsibility, while others struggle.

    What are the benefits of Self Managed Super Fund to buy property?

    When you buy an SMSF complaint property with your superannuation savings, you may be able to save a lot of money through tax incentives. With SMSF properties, rental income is taxed at 15%. Once you hold the property for over a year, the entity will receive further capital gains concessions. The SMSF owner won’t need to pay capital gains tax once they’ve retired. If the property is sold during the build-up phase, the capital gains tax is calculated at a reduced rate.

    Once you’re retired, your tax obligation goes down to 0% if you are getting pension from the fund! This translates into huge profit potential and a higher rental yield.

    You can also invest the income you get from your property investment into another property, helping to build your wealth even more.

    Using your SMSF can be an effective vehicle to enter the property market. A lot of people don’t have enough for a down payment in their personal savings account, but you may be able to use your SMSF to qualify for a property loan.  Setting up an SMSF with family members (Mum and Dad or Husband & Wife) is another classic strategy of pooling individual balances together.

    There are clearly many benefits to buying an investment property together with your SMSF, but we’d advise chatting with an expert lawyer and financial advisor before making any decisions.

    Should you add an SMSF Property investment to your portfolio?

    Ultimately, what’s right for you depends on your situation and your financial goals. Diversifying an SMSF investment portfolio means having money invested across a variety of various investments in order that the SMSF isn’t over-exposed if particular areas of the market fall in value. which may mean spreading money across different asset classes, regions, industries, and investment managers.Talk to the specialists, we can assist you to find out if buying an SMSF-compliant property can help you achieve your goals.

    DISCLAIMER: The information on this page is for general interest and is not intended as advice. For advice and planning, consult an experienced financial planner and specialist. We can introduce you with our panel of accredited specialists to assist you. We specialise in researching and locating the right property for your needs.

    Talk to High Income Property on Self-Managed Super Fund Property

    Why wait — find out how you can use your super fund to purchase the investment property you’ve always wanted. Book a FREE online or face-to-face consultation with High Income Property and let us show you how to build wealth through strategic property investment. 

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