How SMSF lending works
An SMSF borrows through a Limited Recourse Borrowing Arrangement (LRBA). The property is held in a separate bare (security) trust until the loan is repaid, and the lender can only claim the property itself, not other fund assets. Only a limited number of lenders offer SMSF loans, and their rules on deposits, fund balance and liquidity differ.
- Usually 20–30% deposit for residential property
- Lenders check the fund's balance, contributions and liquidity after purchase
- The property must meet the sole purpose test: you can't live in it or rent it to a related party (residential)
- Business owners can sometimes buy their commercial premises through their SMSF
Working with your advisers
SMSF property involves trustees, a bare trust deed, and compliance and tax rules. We handle the lending side and work alongside your accountant, financial adviser and solicitor, who should advise on whether SMSF property suits your retirement strategy.
Frequently asked questions
Can my SMSF buy a house to live in?
No. A residential property held in an SMSF can't be lived in or rented by you or related parties.
How much can an SMSF borrow?
Typically up to 70–80% of the property value for residential, depending on the lender and the fund's position.
Are SMSF loan rates higher?
Generally yes, as it's specialist lending. That's why it pays to compare the lenders who offer them.