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Your superannuation fund is your financial lifeline for retirement. However, as you plan for your golden years, you might be wondering, can I use my super to buy an investment property to help work towards a comfortable retirement? The short answer is yes, buying property in super is possible, but it is not as simple as it may seem, and it is not suited to everyone.
Important: from 10 August 2026, the rules for borrowing to buy property in a self-managed super fund changed. You can still buy property through your super, but if your fund needs to borrow, what it can buy has narrowed. We explain this below. If you have a specific question, jump straight to the FAQs.
You can still buy property through an SMSF.
From 10 August 2026, an SMSF cannot use borrowings (LRBA) to buy residential property.
An SMSF can still borrow to buy commercial (business real) property.
An SMSF can still buy residential property outright using the fund's own money.
Loans set up before 10 August 2026 are not affected.
To invest in property through your super, you will need a Self-Managed Super Fund (SMSF). Unlike regular super funds, SMSFs offer greater control over your investments. But with greater control comes greater responsibility, and to set up an SMSF you will have to take on responsibilities as trustee of your fund. The investment flexibility afforded by an SMSF is the foundation for using super for investment property purchases, as it gives you the flexibility to make decisions about where your money is invested. But do not forget that flexibility comes with the responsibility for the compliance of your fund.
Enabled by legislative changes in recent years, there has been a noticeable shift in the way people invest through their superannuation, and many individuals are now exploring the possibility of using their SMSF to invest in property. This shift is not without reason. Property investment through an SMSF can offer substantial tax advantages and provide a pathway to long-term wealth building under the right circumstances.
You can own the same types of property in a self-managed super fund that you can own in your own name: residential property and business real property. Since 10 August 2026 there is an important difference where your fund needs to borrow. An SMSF can still buy residential property outright using its own money, but it can no longer take out a new loan (a limited recourse borrowing arrangement, or LRBA) to buy residential property. An SMSF can still borrow to buy business real property (commercial property). There are also specific rules around owning residential property in an SMSF, including:
Sole purpose test: the SMSF property investment must meet the sole purpose test, which means it should solely provide retirement benefits for the members. You cannot use the property for personal use or rent it to family members.
Related parties: you cannot purchase a residential property with an SMSF from a related party, and you cannot rent that property to a related party or transfer your existing residential investment property into your super fund.
The other type of property purchase you can make in an SMSF is business real property. This is any property that meets the definition of Business Real Property in the Superannuation Industry (Supervision) Act 1993 (SIS Act) , which requires that the property is used wholly and exclusively for business purposes. This could include industrial workshops, and even farming properties, with special rules.
Business real property in an SMSF has several potential benefits, including tax advantages, asset protection, and the ability to use your SMSF capital to purchase the property. If you are looking to buy commercial property or your own business premises through your fund, see our buying property in super page.
In addition to the rules around the sole purpose test and related parties for residential investment properties, there are other rules and regulations that come with investing in property through superannuation. Here are some key points to keep in mind:
Market value rule: all investments by your SMSF must be made on a commercial 'arm's length' basis. So, investment properties must be valued at current market value, and any leases also need to reflect current market value in the open market for a property of that type.
Assets in the name of the fund: it is a legal requirement of SMSFs that you invest in assets in the name of the fund, not in your own name.
Borrowing arrangements: if your SMSF does not have enough funds to buy a property outright, it may be able to borrow using a limited recourse borrowing arrangement (LRBA), a specific type of loan for SMSFs. The property is held in a separate trust until the loan is repaid. From 10 August 2026, a new LRBA can only be used to acquire business real property (commercial property); an SMSF can no longer enter a new LRBA to buy residential property. Residential property can still be bought outright using the fund's own money, and existing residential LRBAs entered into before 10 August 2026 are not affected.
Property acquisition costs: your SMSF must cover its own expenses related to purchasing the property, such as legal fees, stamp duty, and title transfer costs. However, it is crucial to ensure these costs are directly related to the property purchase and comply with superannuation laws.
Since 10 August 2026, if your fund needs to borrow, it can buy commercial (business real) property, not residential."
In the right situation, investing in property through superannuation offers several benefits:
Tax benefits: holding business real property in an SMSF can offer numerous tax benefits, as SMSFs are tax-effective structures with super funds taxed at a rate of only 15%, which is significantly lower than other tax rates outside of super. Furthermore, owning your business premises in an SMSF and renting it to your business entity can lead to tax efficiency.
Diversification: property can be an addition to your investment portfolio, providing diversification and potentially reducing risk. This can be particularly relevant if your superannuation fund is heavily invested in traditional assets like shares and bonds.
Asset growth: SMSFs give you the ability to use your superannuation savings to help purchase a property investment.
Investing in property through superannuation is not a strategy that will work for everyone, and when you are asking yourself, 'Can I use my super to buy an investment property?' there are some disadvantages and risks you should be aware of before making a decision:
Cash flow: owning a property within an SMSF can pose cash flow challenges, as property is relatively illiquid compared to other assets like shares. Ensuring that your property generates sufficient cash flow to cover your expenses is essential to maintain your fund's financial health. Moreover, when SMSF members reach the pension phase and start drawing income from their super, the minimum pension payment requirements must be met, so planning for adequate cash flow is essential to meet these pension requirements without facing liquidity issues.
Set-up and ongoing costs: property investments within a SMSF generally incur greater set-up costs, especially when using an LRBA. In addition, SMSFs are separate entities with their own financial obligations, including property-related expenses and taxes, which require annual tax returns and audit services that will incur additional expenses.
Complexity: SMSF property investment is complex. And, as trustee of the SMSF, you will be solely responsible for all the investment decisions and compliance with the rules and regulations. If you decide to navigate this path, it is critical you seek professional advice to help run the fund and advise you accordingly so that you can navigate the rules and regulations.
To navigate the complexities of property investment through an SMSF, it is essential to build a dedicated team of professionals, including:
Accountant: an accountant who specialises in SMSFs will help ensure your fund complies with tax regulations and handles financial reporting.
Financial advisor: a financial advisor can assist in creating a holistic investment strategy that aligns with your retirement goals.
Legal professional: legal experts will guide you through the legal aspects of property ownership within an SMSF.
Lender: a lending specialist will help you find the right lender and navigate the borrowing arrangements for your property purchase.
With careful planning and the right team of professionals by your side, the answer to 'can I use my super to buy an investment property to help provide for your retirement?' is yes: property investment within your SMSF can be a valuable addition to your retirement portfolio, helping to provide for your retirement.
With an integrated team across SMSF, accounting, wealth management and lending, Findex has the knowledge and expertise to help you seize opportunities in property investment. If you would like to discuss whether buying property in super is the right strategy for you, speak to our specialists today.
Yes. Your SMSF can still buy residential property outright, and it can still borrow to buy commercial (business real) property. From 10 August 2026 it cannot take out a new loan to buy residential property.
Yes, for business real property (commercial) under a limited recourse borrowing arrangement (LRBA). New LRBAs can no longer be used to buy residential property from 10 August 2026.
Existing residential LRBAs with contracts exchanged before 10 August 2026 are not affected and continue under the existing rules.
In many cases yes. Business real property can generally be bought at market value and leased back to your business on arm's length terms. Our buying property in super page explains how this works.
Disclaimers
The title 'Partner' conveys that the person is a senior member within their respective division and is among the group of persons who hold an equity interest (shareholder) in its parent entity, Findex Group Limited. The only professional service offering which is conducted by a partnership is external audit, conducted via the Crowe Australasia external audit division and Unison SMSF Audit. All other professional services offered by Findex Group Limited are conducted by a privately owned organisation and/or its subsidiaries.
While all reasonable care is taken in the preparation of the material on this website, to the extent allowed by legislation Findex Group Ltd accept no liability whatsoever for reliance on it. All opinions, conclusions, forecasts or recommendations are reasonably held at the time of compilation but are subject to change without notice. Findex Group Ltd assumes no obligation to update this content after it has been issued. The information contained is of a general nature only and does not take into account your objectives, financial situation or needs. You should consider whether the information is suitable for you and your personal circumstances. You should seek personal financial advice before acting on any material.
This document contains general information and is not intended to constitute legal or taxation advice. If you need legal or taxation advice, we recommend you speak to a qualified advisor.
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Dale has almost 35 years’ experience working in the finance sector. Dale provides valuable insights and guidance to both colleagues and clients in the complex world of Self-Managed Super Funds.
As a Manager in our SMSF Administration & Advisory team, Dale helps to develop effective strategies so clients make informed decisions. With his wealth of knowledge and expertise, Dale also plays a crucial role in our Northern NSW office locations to ensure compliance with the ever-changing regulatory landscape.
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