Borrowing to buy property through a self-managed super fund is a genuine option for some investors, but it comes with a specific structure and rules that don't apply to ordinary property lending.
Why SMSF loans are structured differently
SMSF property loans typically use a Limited Recourse Borrowing Arrangement, which means the lender's recourse in the event of default is limited to the specific asset purchased, not the fund's other assets. This structure exists because of superannuation law, not lender preference.
Not every property or purpose qualifies
Superannuation rules restrict what a fund can buy and how the property can be used — for example, members generally can't live in a residential property bought by their own SMSF. These rules sit alongside, not instead of, the lending requirements.
Specialist advice is essential, not optional
Because SMSF lending intersects superannuation law, tax law and lending policy, this is an area where a broker, a licensed financial adviser and often an accountant need to work together — it's not a decision to make from a mortgage broker's advice alone.
Chris Brown
Managing Director & Finance Broker at New Vision Financial Services, a credit representative under Australian Credit Licence 384704 and a member of the FBAA and AFCA. More about Chris →
Frequently asked
Can any self-managed super fund borrow to buy property?
Not automatically — your fund's trust deed needs to permit borrowing, and the arrangement must comply with superannuation law. This is generally confirmed with your fund's adviser before approaching lenders.
Can I live in a property my SMSF buys?
Generally no, for residential property — superannuation rules prohibit members and related parties from living in or renting a residential property held by their own SMSF, with limited exceptions for business real property.
Do fewer lenders offer SMSF loans?
Yes, SMSF lending is a more specialised part of the market, with fewer lenders active in this space compared to standard home and investment loans.