Skip to content

SMSF Buying

Self-Managed Super Funds (SMSF) have increased in popularity over the past 10 years as people access the money as a ready made deposit to invest in property or other investments. They are highly regulated and therefore it is essential that you obtain financial advice from your financial planner or accountant. SMSF lending within your Self-Managed Super Fund has significant restrictions and requirements that need to be fully understood before making this decision. We have substantial experience with SMSF lending and can assist you to understand your lending options.


To help you better understand your options we have put together some FAQs to help answer many of your questions. If your question is not answered below please contact us so we can answer it for you.

  • Can a SMSF borrow money?

    There are lenders which provide loans to purchase residential, commercial or rural properties in an SMSF.

  • What’s a Limited Recourse Borrowing Arrangement (LRBA)?

    This is the official name for a loan that is used in a SMSF.

  • What is a Bare Trust?

    As well as a SMSF trust, a Bare Trust will also be required to borrow.  It is sometimes referred to as a Custodian or Security Trust.  For a full explanation, please consult your financial advisor.

  • Can an SMSF borrow to build?

    The lenders do not provide construction loans.  Other advice in this area can be provided by an AFSL holder.

  • Can a SMSF use equity in a property already owned as a deposit to purchase the next property?

    Lenders will not allow this due to the legislation.

  • Can a SMSF borrow to renovate or improve a property?

    Lenders do not provide renovation loans inside SMSF.  There is an extra layer of rules in the legislation where there is property lending in a SMSF.  It is best to obtain advise from a Financial Planner.

  • Why are SMSF loans more expensive?

    Lenders generally advise there is more complexity and risk associated with these loans.

  • How much can my SMSF borrow?

    In general, it is possible to borrow up to 70% of the purchase price for a residential or commercial property.  In some cases, the residential lenders will require a buffer of 10% of the purchase price to be remaining in the fund after the purchase for liquidity purposes.

  • Why do SMSF loan take longer to settle?

    The lenders have more steps in their process to approve the loan and also there are often additional steps for the borrower involved such as setting up trusts etc, prior to lodging the application.

  • How many lenders offer loans to SMSFs?

    While a few lenders did not enter the market or reduced their appetite or withdrew, there are still sufficient lenders to offer good choice. There are however some critical differences between some of the products which will make a big difference to how you manage the investing with the fund.

  • Can an SMSF get a loan pre-approval?

    In general, yes and it is a good idea.

  • Can SMSFs get interest only loans?

    Most lenders offer an initial Interest Only period on the loans which will revert to a principal and interest repayment from there.

  • Can SMSFs get fixed rate loans?

    Yes, there are fixed loans as well as variable loans, similar to lending outside of superannuation.

Need more information?

For more information on SMSF Investment Loans, contact us.