Buying a residential property in your SMSF

SMSF’s are allowed to invest in a residential property, but there are many rules to follow.

Borrowing for property purchase in SMSF

SMSF’s are not allowed to borrow directly, they can do so via limited recourse borrowing arrangement.

The property is then placed in a separate trust and the other assets are protected if the fund subsequently defaults on making the property loan repayments.

Provided this is in line with your investment strategy we can get this organised at our office.

Property valuation

Property must be carried at market value. You are required to revalue the property at least every three years and if the SMSF is paying pension, then each year.

Related party transactions

You are allowed to purchase the residential property from your SMSF, provided it is at market value.

It is not possible to do this transaction the other way, i.e. you are not allowed to sell a residential property from yourself to your SMSF.

You are also not allowed to lease / use the residential property from your SMSF.

To satisfy the sole purpose test, the residential property held by the SMSF must be strictly an investment only.



Frequently asked questions

No, your SMSF is not allowed to do so.

Yes, provided it is at market value and terms.

No, you can only lease it to unrelated parties and at market value.

Related parties are members and:

  • The relatives of each member
  • The business partners of each member
  • Any spouse or child of those business partners
  • Any company the member or their associates control or influence
  • Any trust the member or their associates’ control.

Employers who contribute to your superannuation and associates of employers who do so (business partners and companies or trusts the employer controls and companies and trusts that control the employer) are also related parties.


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Investment strategy