SMSF residential property
Residential investment property held inside super. Up to 80% LVR with select lenders. Strict rules: must be at arm's-length, can't be lived in by you or related parties, can't be rented to family. Tenant must be unrelated.
Why SMSF property
Direct property exposure inside super
A Self-Managed Super Fund can borrow money to buy residential or commercial property using a Limited Recourse Borrowing Arrangement (LRBA). The property sits inside the fund, rental income flows to the fund, and capital gains compound at concessional super tax rates — currently 15% on income and 10% on capital gains for assets held longer than 12 months.
For business owners, the strategy gets even more interesting: your SMSF can buy your commercial premises and lease it back to your business at arm's-length market rent. Every rent payment is moving wealth out of the business and into retirement, deductibly.
Two property types
Residential or commercial — both work in SMSF
SMSF commercial property
Commercial property — office, retail, warehouse, industrial — held inside super. Up to 70% LVR. Can be leased back to your own business at market rent, subject to documented lease and proper valuation.
Commercial advantages
Why commercial SMSF property is uniquely powerful
15% concessional tax on rent
Rental income earned inside the SMSF is taxed at 15% — versus your marginal personal rate (potentially 47%) on the same property held personally.
In-house asset rule exception
Normally, an SMSF can't have more than 5% of assets invested in related parties. Business real property (commercial premises leased to a related party business) is exempt — making leaseback uniquely powerful.
Rent flows to retirement
Every rent payment moves wealth from your business (where it would be taxed at company rate, then again on distribution) into your SMSF, taxed at 15%, then 0% in pension phase.
The leaseback strategy
SMSF + your business premises = retirement wealth machine
Business owners with commercial premises (or paying significant commercial rent to an unrelated landlord) can use SMSF property to redirect that rent flow into their own retirement wealth.
The structure: your SMSF buys the commercial property, your business signs an arm's-length commercial lease with the SMSF at market rent, and rent payments build retirement wealth at concessional tax rates — instead of enriching an external landlord.
Done well, this strategy moves substantial wealth into super, deductibly, over a 10–15 year period. Done badly, it triggers contributions caps, in-house asset rule breaches, or ATO compliance issues. Get accounting and legal advice before structuring.
Eligibility
Is your SMSF ready to borrow?
Established SMSF
Most lenders want to see the SMSF has been established for 6–12 months with trustees properly appointed, accounts in order and previous annual audits clean.
Deposit funds
20% deposit minimum for residential SMSF (some lenders 30%+); 30%+ for commercial SMSF. Funds must already be in the SMSF — you can't fund the deposit personally.
Bare trust structure
SMSF lending uses a Limited Recourse Borrowing Arrangement (LRBA). The property is held by a separate Bare Trust, with the SMSF as beneficiary. Your accountant and solicitor establish this structure.
Serviceability
Lender assesses whether the SMSF can service the loan from rental income plus ongoing concessional contributions. Members' personal income doesn't directly count — but contribution capacity does.
Property type rules
Residential must be unrelated-party tenanted (no family, no living in it). Commercial must be at arm's-length market rent. Property must be "single acquirable asset" — no cross-collateralisation.
Compliance discipline
SMSF lending is heavily regulated. Trustees take on substantial compliance responsibility. We strongly recommend coordinating with a specialist SMSF accountant before proceeding.
Residential vs commercial
Residential vs commercial SMSF lending compared
Residential SMSF
- LVR up to 80% with select lenders
- Cannot be lived in by you or family
- Must be tenanted at market rent to unrelated party
- Lower entry cost typically
- More straightforward valuation
- Strong long-term capital growth profile in metro areas
Commercial SMSF
- LVR up to 70%
- Can be leased to your own business (business real property exception)
- Higher yields typically (5–8% gross vs 3–4% residential)
- Higher entry cost
- Tenant covenant matters — vacancy risk needs to be understood
- Powerful business owner wealth strategy when leased back
How we work
From idea to settlement
01
SMSF readiness check
We review your SMSF's deposit funds, trust deed, accounting position and member balances to confirm borrowing is viable.
02
Strategy & structuring
We coordinate with your SMSF accountant and solicitor on bare trust setup, LRBA documentation and lender approach.
03
Lender shortlist
Few lenders offer SMSF lending and policies vary widely. We match your fund's profile to the right lender at the right LVR.
04
Settlement & ongoing
We project-manage application, valuation and settlement, then stay involved through the life of the loan and refinancing as your SMSF grows.
Client stories
Real outcomes for real clients
★★★★★
"The team made what felt like a daunting process completely manageable. We secured a rate the bank wouldn't touch directly and were in our first home eight weeks later."
★★★★★
"After years of being told no by the majors for our self-employed structure, MortgageHQ found a solution. Approval came within a fortnight and on competitive terms."
★★★★★
"We refinanced our commercial property and unlocked equity for a second purchase — they structured the whole deal across two lenders. Saved us hundreds of basis points."
Answers
SMSF lending — frequently asked questions
How much can my SMSF borrow to buy property?
Up to 80% LVR for residential SMSF property (lender-dependent) and up to 70% for commercial SMSF property. Borrowing capacity is assessed by the lender based on the SMSF's rental income and concessional contribution capacity — not directly on members' personal income.
Can I live in a residential property owned by my SMSF?
No. ATO rules strictly prohibit you or any related party from living in a residential property held by your SMSF, both during the accumulation phase and pension phase. The property must be rented to an unrelated party at arm's-length market rent.
Can my SMSF buy commercial property and lease it to my own business?
Yes — this is the 'business real property' exception to the in-house asset rule. The lease must be at arm's-length market rent, documented properly, and the property must meet the business real property definition (used wholly and exclusively in a business). It's one of the most powerful SMSF wealth strategies available to business owners.
What is a Limited Recourse Borrowing Arrangement (LRBA)?
An LRBA is the specific borrowing structure SMSFs must use. The property is held by a separate Bare Trust (the SMSF is the beneficiary), the loan is taken in the name of the SMSF trustee, and the lender's recourse is limited to the property itself — the SMSF's other assets are protected. The structure is established by your solicitor and accountant before settlement.
Do I need a minimum SMSF balance to borrow?
Most lenders prefer a minimum SMSF balance of $200,000 before borrowing, though some specialist lenders go lower. The fund needs sufficient liquidity post-purchase to cover loan repayments, ongoing expenses and a reasonable buffer. We model this before recommending you proceed.
Should I set up a new SMSF specifically to buy property?
Sometimes — but not always. Setting up an SMSF is a significant commitment with annual costs of $2,000–$5,000+ in accounting and audit fees. The strategy only makes sense if the SMSF will hold enough wealth (typically $200k+) to justify those fixed costs, and if direct property aligns with the long-term retirement plan. Always get specialist SMSF advice before establishing a fund.
Get in touch
Let's start the conversation
No obligation. Completely confidential. We'll respond within one business day to set up a no-pressure initial chat about your goals and the lending options available to you.
- Free initial consultation — no fees to talk
- Access to 60+ lender panel including major banks
- 25+ years of broker experience on every file
- We work with your accountant and advisers
Get in touch
Book a free consultation
Tell us a little about your situation and we'll be in touch within one business day. No obligation, completely confidential.
Ready for a smarter finance conversation?
Tell us about your situation — first home, refinance, commercial, SMSF or anything in between. We'll find the right structure across 60+ lenders. No obligation, completely confidential.