SMSF Investment Loan | Buy Property Through Your Super Fund

Using your self-managed super fund (SMSF) to invest in property can be a powerful retirement wealth strategy. Property purchased through an SMSF can benefit from tax advantages, compound growth over decades, and rental income within a concessionally taxed environment.

However, SMSF loans and investment loan structures are complex. They require compliance with superannuation law, specific lending arrangements, and careful coordination between your broker, accountant, and legal advisors. Getting the structure wrong can lead to compliance issues or lost opportunities.

At MXJ Finance, we specialise in SMSF property investment loans and work closely with SMSF trustees, accountants, and solicitors to ensure your property purchase is structured correctly and financed appropriately. With over 10 years of lending experience and access to specialist SMSF lenders, we guide you through each step with confidence and care.

What Are SMSF Property Investment Loans?

An SMSF investment property loan allows your self-managed super fund to borrow money to purchase property. However, SMSF loans and investment loans differ because of superannuation regulations.

SMSF property loans must use a Limited Recourse Borrowing Arrangement (LRBA). This means:

• The property is held in a separate trust until the loan is fully repaid
• If the SMSF cannot repay the loan, the lender’s recourse is limited to the property itself (not other SMSF assets)
• The loan must be used solely for property acquisition (not renovations or improvements)
• The property cannot be altered significantly while under the LRBA

These requirements exist to protect your super fund’s other assets and ensure compliance with superannuation law. While this structure provides important protections, it also means SMSF investment loans typically have:

• Higher interest rates (usually 0.5-1% above standard investment rates)
• Larger deposit requirements (typically 20-30%)
• Stricter lending criteria
• More documentation and setup costs

Benefits of SMSF Property Investment

Tax Advantages

Rental income and capital gains within your SMSF are taxed at just 15% during the accumulation phase (compared to your marginal tax rate for properties owned personally). Once your SMSF enters pension phase, investment income and capital gains can be tax-free.

Long-Term Wealth Building

Property held in your SMSF benefits from decades of compound growth. Rental income can be reinvested within the fund, and capital growth accumulates in a tax-advantaged environment.

Retirement Income

Investment property in your SMSF can provide rental income during retirement, supplementing your pension withdrawals and providing cash flow security.

Portfolio Diversification

Adding property to your super fund diversifies your retirement savings beyond shares and managed funds, reducing overall portfolio risk.

SMSF Loan Requirements

To qualify for SMSF property investment loans, you’ll typically need:

• An established SMSF with a compliant trust deed (allowing property investment)
• 20-30% deposit within the SMSF
• Evidence that the SMSF can service loan repayments from existing assets or super contributions
• Separate bare trust and trustee structure for the LRBA

Most lenders also prefer SMSFs with:

• Minimum fund balance of $150,000-$300,000
• Regular contributions demonstrating ongoing serviceability
• Sound financial management and compliance history

Types of SMSF Investment Property Loans

Residential SMSF Loans

The most common SMSF investment property loan type is for established residential property. Your SMSF can purchase houses, apartments, or townhouses to generate rental income and capital growth. Residential SMSF investment loans typically offer the best rates and terms because lenders view established residential property as lower risk.

Commercial SMSF Loans

Your SMSF can purchase commercial property, including offices, retail spaces, warehouses, or industrial properties. Some SMSF trustees purchase commercial property and lease it back to their own business, though strict requirements apply. Commercial SMSF loans may have different loan-to-value ratios and interest rates.

Off-the-Plan & New Construction

While possible, purchasing off-the-plan or new construction through your SMSF is more complex. The LRBA structure limits your ability to make changes during construction, and settlement delays can create complications. At MXJ Finance, we can help you understand these risks and find lenders who support these purchases.

How We Help with SMSF Loans

Step 1: Free SMSF Strategy Session

We start with a comprehensive 30-minute consultation where we:

• Review your SMSF’s financial position and balance
• Assess your borrowing capacity under LRBA rules
• Calculate costs, including legal, accounting, and lending fees
• Provide recommendations on property type and loan structure

Step 2: Lender Comparison & Application

We access specialist lenders who understand SMSF loans and investment loans:

• Compare rates and terms from SMSF-approved lenders
• Identify lenders with experience in LRBA structures
• Coordinate with your SMSF accountant and solicitor, or refer you to our partnered ones if you choose to
• Present clear options with transparent fee structures

Step 3: Trust Structure & Compliance

We work with your legal and accounting advisors to ensure:

• Bare trust is established correctly for the LRBA
• All documentation meets superannuation law requirements
• Property purchase aligns with your SMSF’s investment strategy
• Loan structure complies with limited recourse rules

Step 4: Settlement & Ongoing Support

We manage the settlement process and provide ongoing support, including regular loan reviews, refinancing opportunities as your SMSF grows, and guidance on repaying the LRBA efficiently.

Many trustees work with us for multiple SMSF property purchases over their accumulation phase.

Why Choose MXJ Finance for SMSF Loans

Specialist SMSF Knowledge

SMSF lending is a specialist area. Unlike general mortgage broker services, SMSF property investment loans require a deep understanding of superannuation law, trust structures, and lender requirements. We’ve helped numerous SMSF trustees navigate complex property purchases with confidence.

Lender Relationships

Not all lenders offer SMSF loans, and those that do have varying policies and levels of experience. We maintain relationships with banks and non-bank lenders who specialise in SMSF lending, understand LRBA compliance, and offer competitive rates for super fund property purchases.

Collaborative Approach

SMSF property purchases require coordination between your broker, accountant, solicitor, and financial advisor. We work collaboratively with your professional team to ensure all aspects of the purchase are structured correctly and legally compliant.

Transparent Process

We explain costs clearly upfront, including lending fees, legal costs for bare trust establishment, and accounting fees for compliance. There are no surprises, and we ensure you understand each step before proceeding.

Ready to Invest Through Your SMSF?

Using your self-managed super fund to invest in property can accelerate your retirement wealth building. However, SMSF property purchases require specialist guidance to ensure compliance and optimal structure.

With over 10 years of lending experience, access to specialist SMSF lenders, and a collaborative approach with your professional advisors, MXJ Finance helps you confidently navigate SMSF investment property loans.

Get in touch to start your SMSF property journey with a strategy session.

Refinancing is quick and easy with a trusted mortgage adviser.
Call us now for an assessment and guidance on next steps, at no cost to you.