A Self-Managed Super Fund (SMSF) can borrow to purchase property through a Limited Recourse Borrowing Arrangement (LRBA). It's a powerful strategy — but also one of the most complex in the lending market. Lenders who offer SMSF loans have strict criteria, and the setup must be done correctly to comply with ATO regulations and super law.
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Frequently asked questions
What is an SMSF loan (LRBA)?
An LRBA (Limited Recourse Borrowing Arrangement) allows an SMSF to borrow money to purchase a single asset — typically property. The lender's recourse is limited to that asset only, protecting other fund assets.
What deposit does an SMSF need to buy property?
Most SMSF lenders require a deposit of 20–30% of the property purchase price, plus costs. The fund must have sufficient liquidity after the purchase to meet ongoing expenses and super obligations.
Can my SMSF buy residential property?
Yes, but there are restrictions. The property cannot be purchased from a related party, and no fund member or related party can live in or use a residential property owned by the SMSF.
Should I set up an SMSF just to buy property?
This depends on your super balance, goals, and circumstances. We recommend consulting with your financial adviser or accountant before establishing an SMSF purely for property investment. We can introduce you to specialists in this area.