Self Managed Superannuation Fund (SMSF) Loans

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Use Your Super to Invest in Property

A Self-Managed Super Fund (SMSF) loan allows you to use your superannuation to purchase investment property through your SMSF. For many Australians, this can be a powerful strategy to build long-term wealth and retirement security.

However, SMSF lending is complex and requires careful structuring, strict compliance, and the right Lender.

At First Point Group, we specialise in helping Clients and their Advisers navigate SMSF borrowing with confidence. We work closely with accountants, financial planners and solicitors to ensure the loan structure aligns with both lending requirements and superannuation regulations.

What Is an SMSF Loan?

An SMSF loan (often referred to as an LRBA – Limited Recourse Borrowing Arrangement) allows your Self-Managed Super Fund to borrow money to purchase an investment asset, typically a residential or commercial property.

Unlike traditional lending, SMSF loans must follow specific legal structures, including:

  • The loan is made to a bare trust (holding trust)

  • The lender has limited recourse to the property purchased (i.e. no ability to recover their loan from other SMSF assets)

  • The asset must comply with SMSF investment rules (SIS Act)

  • The property is held in trust until the loan is repaid

  • Once the loan is fully repaid, the property title transfers to the SMSF

What Can an SMSF Buy?

An SMSF can typically borrow to purchase:

Residential Investment Property

  • Apartments

  • Houses

  • Townhouses

  • House and land packages

Commercial Property

  • Offices

  • Warehouses

  • Retail premises

  • Factories

Commercial property is particularly popular because your own business may be able to lease the property from your SMSF, providing both investment and business benefits.

For Residential properties, the SMSF Members cannot occupy the property.

Key Benefits of SMSF Property Investment

When structured correctly, and subject to advice from an Accountant and/or Financial Planner, SMSF borrowing can provide several advantages:

Potential tax efficiency

  • Rental income may be taxed at a lower rate compared to non-SMSF investment property rental income

  • Capital Gains Tax may reduce after 12 months

  • Potential for low tax in ‘pension phase’

Control of investments

  • Greater control over how your retirement funds are invested

Business property ownership

  • Business owners may purchase their business premises through their SMSF (business pays rent to the SMSF)

Long-term wealth creation

  • Property growth and rental income contribute to retirement savings

Important Considerations

SMSF borrowing is not suitable for everyone and must be approached carefully.

Key considerations include:

  • SMSF compliance requirements

  • Deposit requirements (typically 20–30% or more)

  • Higher loan costs compared to standard investment loans

  • Strict loan structures

  • Ongoing SMSF administration

For this reason, SMSF lending should always be undertaken in conjunction with your Accountant or Financial Adviser.

At First Point Group, we ensure the finance structure works alongside your broader financial strategy.

Why Work With First Point Group?

SMSF lending requires a broker who understands both Lender policy and the regulatory framework.

Our team provides:

  • Access to specialist SMSF lenders

  • Guidance on loan structuring

  • Coordination with Accountants and Financial Planners

  • Support throughout the entire purchase process

  • Clear explanations of risks, costs and requirements

We take the time to ensure the strategy is suitable and that the loan structure is set up correctly from the beginning.

Speak With an SMSF Lending Specialist

SMSF loans can be a powerful strategy when structured correctly, but they require careful planning and specialist advice.

If you are considering using your super to invest in property, the team at First Point Group can help you understand the options and guide you through the process.

Contact us today to discuss whether an SMSF loan may be suitable for your situation.

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