Buying property with an SMSF

One reason people consider self-managed super funds (SMSFs) is the ability to invest directly in property. 

But there are strict rules around what you can buy, how the property can be used and, following recent legislative changes, whether you can borrow to obtain it.

Here's what you need to know.

Can an SMSF buy property?

Yes, under certain conditions.

An SMSF can invest in both residential and commercial property, provided the investment:

• Aligns with the fund's investment strategy

• Complies with superannuation laws

• Meets the sole purpose test of providing retirement benefits to members

These rules may differ depending on the type of property.

Residential vs commercial 

Residential property

An SMSF can buy residential property, but there are important restrictions.

Generally, the property:

• Can't be purchased from a related party

• Can't be lived in or rented by members or their relatives.

Commercial property

Commercial property can offer greater flexibility.

An SMSF may be able to purchase eligible business real estate from a related party and lease it back to a related business. The arrangement must be on commercial terms, including market rent.

Can an SMSF borrow to buy property?

Yes, but the rules are changing.

From mid-August 2026, SMSFs can no longer enter into new limited recourse borrowing arrangements (LRBAs) to purchase residential property. 

Existing residential LRBAs are grandfathered and will continue under the current rules if applicable.

In practice, this means:

• Residential property: SMSFs can still buy residential property, but new purchases will generally need to be funded using the fund's existing cash rather than borrowed money.

• Commercial property: Borrowing through an LRBA remains available for eligible commercial and business property, subject to lender approvals and the relevant legislation.

If you're considering borrowing through your SMSF, it's important to understand the current rules before entering into any arrangement.

Minimum balances to purchase property

There is no minimum SMSF balance to purchase property.

However, your fund needs enough money to cover:

• The purchase price

• Stamp duty and legal costs

• Ongoing expenses, such as insurance, rates and maintenance

• Enough liquidity to meet the fund's other obligations

Your property investment should also be consistent with your established investment strategy.

What are the tax implications?

Property held within an SMSF may receive different tax treatment compared with investments held outside super.

Depending on your fund's circumstances, this may include:

• Concessional tax on rental income

• Concessional capital gains tax treatment

• Deductions for eligible property expenses

Because the tax treatment depends on your circumstances and whether your fund is in accumulation or retirement phase, you should seek independent tax advice before making any decisions.

Pros and cons of buying property with an SMSF

Potential benefits

• Greater control over your investment strategy

• Access to direct residential and commercial property

• Potential concessional tax treatment available within super

• Business owners may be able to own eligible commercial premises through their SMSF and lease them back to their business on commercial terms

Things to consider

• Borrowing via an LRBA to buy residential property is no longer available

• Property is often harder to sell quickly compared with other investments

• All ongoing costs must be paid by the SMSF

• Trustees remain responsible for ensuring the investment complies with regulations and the fund's investment strategy

How Stake Super supports property investors

Stake Super Property is designed for SMSFs investing in residential and commercial property.

Our team helps manage the admin, accounting, annual tax return and audit requirements. That helps you stay on top of your compliance obligations while remaining in control of your investments.

If you're purchasing eligible commercial property with an LRBA, we can also help establish the required bare trust structure and company.

Thinking about buying property through your SMSF?

Buying property through an SMSF comes with  few extra steps.  Stake Super can help you understand what’s involved.

Speak to an SMSF professional or get started online today. 

This is not financial product advice, nor a recommendation that a self-managed super fund (‘SMSF’) may be suitable for you. Your personal circumstances have not been taken into account. SMSFs have different risks and features compared to traditional superannuation funds regulated by the Australian Prudential Regulation Authority (‘APRA’). Stake SMSF Pty Ltd, trading as Stake Super, is not licensed to provide financial product advice under the Corporations Act. This specifically applies to any financial products which are established if you instruct Stake Super to set up an SMSF. When you sign up to Stake Super, you are contracting with Stake SMSF Pty Ltd who will assist in the establishment and administration of an SMSF under a ‘no advice model’. You will also be referred to Stakeshop Pty Ltd to enable your trading account and bank account to be set up in order to use the Stake Website and/or App. For more information about SMSFs, see our SMSF Risks page.

Ciara Conway

Commercial Manager - Stake Super

Ciara is a Commercial Manager at Stake Super, with over 10 years of experience in the SMSF industry and an MA in Accountancy and Finance from Heriot-Watt University in Edinburgh, United Kingdom. Having previously worked at a chartered accounting firm and one of the largest SMSF administrators in Australia, Ciara has extensive knowledge of SMSF compliance. She is also a current member of the SMSF Association.