SMSF Loans: How to Buy Residential or Commercial Property Through Your Super
Christian Stevens, Mortgage Broker
Published January 31, 2025, 2:10 p.m ET
Using your Self-Managed Super Fund (SMSF) to invest in property can be a powerful wealth-building strategy — but it comes with strict rules and a very different lending process compared to standard home loans.
Here’s what you need to know before buying residential or commercial property through your super.
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🔑 Key Facts
- Self-Managed Super Funds (SMSFs) can borrow to invest in property under strict lending rules.
- You’ll need a Limited Recourse Borrowing Arrangement (LRBA), a higher deposit, and lender approval aligned with SMSF law.
- SMSF loans are available for both residential and commercial property — but not for personal use.
- Flint helps you navigate SMSF lending from strategy to settlement with lender-matching and compliance support.
What is an SMSF Loan?
An SMSF loan is a limited recourse borrowing arrangement (LRBA) that allows your super fund to borrow money to purchase a property.
The key difference? The lender’s rights are limited to the single asset (the property) — they can’t access other SMSF assets if things go wrong.
Property Types You Can Buy with an SMSF
Residential Property:
- Must be purchased for investment purposes only
- Cannot be lived in by a fund member or related party (current or future)
Commercial Property:
- Can be leased back to your own business under a commercial lease arrangement (subject to strict rules)
- Popular for business owners looking to “be their own landlord”
SMSF Lending Criteria: How It's Different
Lenders assess SMSF loans much more conservatively:
- Larger deposits required (minimum 20–30% for residential, 30–40%+ for commercial)
- Stricter serviceability checks based on projected rental income and super contributions
- Higher interest rates compared to standard investment loans
- SMSF setup and compliance costs must be factored into the plan
Tips:
- Ensure your SMSF trust deed allows borrowing
- Set up a bare trust (holding trust) as required
- Work with specialist brokers and lenders familiar with SMSF structures
Key Risks to Manage
SMSF property investing isn’t for everyone. Important risks include:
- Reduced liquidity in your super fund (property is not easily sold)
- Complex compliance requirements with the ATO
- Higher loan setup costs and legal fees
Smart strategies:
- Keep diversified assets inside your SMSF (not just property)
- Ensure cash flow projections are realistic
- Seek financial and legal advice before committing
📞 Ready to Invest Smarter Through Your Super?
At Flint, we help you navigate the complexities of SMSF lending with confidence. Our brokers:
- Connect you with SMSF-accredited lenders
- Help structure loans for smoother compliance and serviceability
- Work alongside your accountant or financial planner for holistic support
Get in touch today and let’s build your future wealth the smart way — with your super fund working harder for you.
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