Using Super to Buy Property: BrokerCo Explains the SMSF Option
For many Aussies, the idea of using superannuation to buy property feels complicated or out of reach. But with self-managed super funds (SMSFs) becoming more common, it’s a strategy that’s attracting growing interest.
How Does Buying with Super Work?
Unlike standard property purchases, SMSF lending comes with additional legal and compliance requirements. Buyers need:
- A financial planner to provide a statement of advice
- An accountant to set up the fund correctly
- A bear trust to act as the purchasing entity
These steps ensure everything is above board and compliant with Australian regulations.
The Key Restrictions
Buying property with super isn’t as simple as picking up an investment property through a normal mortgage. A few important rules apply:
- The property must be for investment purposes only
- You cannot live in the property (nor can your family members)
- Access to funds generally comes later in life, often through selling the property and drawing the money back into super
- Tax obligations still apply when it’s sold
Who Is It Right For?
SMSF property lending usually suits:
- Investors who already own their own home
- Those with existing investment experience
- People who have built up at least $200,000 in super
It’s not designed for first-home buyers or those looking to live in the property themselves. Instead, it’s a pathway for experienced investors to use their super to grow wealth through property.
Buying property with super is certainly possible, but it does come with added complexity. To do it properly, you’ll need professional advice from both a financial planner and an accountant, as there are strict compliance and legal structures to follow. It’s important to remember that any property purchased through super must be for investment purposes only, you can’t live in it yourself or let family members benefit.
Generally, you’ll also need to have at least $200,000 built up in super to make the strategy viable. And throughout the process, it’s crucial to factor in compliance, legal obligations, and potential tax considerations to ensure everything is done by the book.
Thinking About Buying with Super?
Self-managed super funds open up a whole new way to invest in property, but the process can be tricky to navigate alone. At BrokerCo, we’ll run the numbers, connect you with the right professionals, and make sure your SMSF property strategy is set up the right way.