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Self Managed Super Fund Property

Utilising your superannuation to invest in property presents a viable avenue for wealth accumulation. The Superannuation Law permits property acquisition through a Self Managed Superannuation Fund (SMSFs), provided specific conditions are met. Current regulations also allow direct investment in various property types, be it residential or commercial, enabling investors to leverage property as a means of building wealth and generating income within their superannuation framework.

Here’s how it operates:

If you wish to enter the property market using your SMSFs but lack the full purchase amount, your SMSFs may possess 30% to 40% of the property’s purchase price, along with additional acquisition expenses (the exact range depends on the property type and lender criteria).

Your SMSFs can acquire the property by borrowing the remaining funds through a “limited recourse loan.” In the event of default, the lender can only access the property and not any other assets within the SMSFs. The property is held in trust for the SMSFs, which is entitled to its rental income. Your SMSFs then makes loan repayments to gradually pay off the debt. Once the loan is fully repaid, legal ownership of the property can be transferred to the SMSFs.

Benefits of this approach include:

Rental Income

Rental income can assist in repaying the loan.

Employer Contributions

Contributions made by your employer can also contribute to loan repayments.

Tax Efficiencies

Members of an SMSFs can access tax advantages unique to the superannuation environment, such as:

  • Exemption from capital gains tax upon retirement.*
  • Potential tax deductibility of loan repayments (provided members engage in salary sacrifice).
  • Negative gearing benefits within the SMSF framework.
  • Income, after expenses and capital gains, is taxed at a maximum rate of 15%, compared to the potential 47% rate for regular investors.
  • Asset Protection

    SMSFs assets are generally safeguarded against debt recovery and bankruptcy proceedings.


    Lenders have no recourse to your SMSFs assets in case of default, ensuring the security of SMSFs assets.

    Portfolio Diversification

    Property acquisition can help reduce investment portfolio volatility and risk.

    Important considerations:

    Seek Professional Advice

    Consult with legal or accounting professionals to establish the appropriate structure and ensure compliance with superannuation law.

    Align with SMSFs Investment Strategy

    Property investments must align with the SMSFs investment strategy.

    Personal Guarantees

    Loan arrangements may involve personal guarantees, potentially exposing guarantors to liability.


    Superannuation law is intricate; therefore, expert guidance and management are crucial. Legal and accounting advice should be sought when contemplating property investment via superannuation or SMSFs.

    If you lack an existing SMSFs, we can assist you in establishing one tailored to your property investment objectives. We can provide insights into potential benefits, eligibility criteria, the appropriateness of property investment, and guide you in structuring the right type of SMSFs.

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