Q&A · Last reviewed 2026-05-01
How do I buy an investment property with an SMSF?
SMSF property purchases require: an established SMSF (typically $200K+ balance), a Limited Recourse Borrowing Arrangement (LRBA) if borrowing, a bare-trust holding the property, and adherence to the sole-purpose test (the property can't be used personally). Stamp duty + land tax apply normally.
Self-Managed Super Funds can hold direct property, residential or commercial, but the structure is rigid. The fund must comply with sole-purpose test (s62 Superannuation Industry (Supervision) Act 1993): the property's only purpose is providing retirement benefits. Members can't live in it, rent it to relatives, or use it personally.
If borrowing within SMSF, you need a Limited Recourse Borrowing Arrangement (LRBA): a separate bare trust holds the property, and the lender's recourse is limited to that property only (not other SMSF assets). LVRs typically 60-70%; rates 1-2% above standard residential. Documentation requirement is heavier than personal lending.
Stamp duty applies normally at purchase. Land tax applies based on each state's SMSF rules, most states treat SMSFs as separate landholders for the threshold (so the $300K-$668K residential threshold applies separately to your personal name). Annual SMSF audit + actuarial certificate adds $2-5K/year in compliance cost.
When SMSF property works: members 50+ saving for retirement with adequate balance, commercial property linked to the member's business (paying rent into super), conservative LVR. When it doesn't: balances under $200K (audit + LRBA fees eat returns), residential PPOR aspirations, or short-term flips (super preservation rules block early access).
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Informational. Not financial advice. Verify with a licensed adviser appropriate to your circumstances.
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