SMSF Lending2023-07-17T15:35:35+10:00


Purchase property through your SMSF with our experienced team.

Buying real estate through an SMSF is more complicated than other types of property purchases. It is recommended to engage the services of a professional mortgage broker like us to assist you throughout the process. At Simplify Finance, we have an experienced team who can help answer any questions you may have if you are considering purchasing property through an SMSF. Once your SMSF is established, we recommend applying for a loan and obtaining ‘pre-approval’ so that you’re ready to purchase when the time comes.

Benefits of buying property with your SMSF
  • Your SMSF can purchase residential or commercial property worth more than its available funds through the benefits of gearing.
  • Your SMSF will receive all income and capital growth (even if the property has not been paid off).
  • Your SMSF can also use income from the property to help pay off the loan. There are tax benefits too.
Establishing your SMSF
  • It’s important that you first establish your SMSF if you want to buy property through it; it can’t be done in retrospect and the value of the SMSF portfolio will determine your purchasing and borrowing power.
  • When your SMSF is set up, the Trust Deed needs to give the Superannuation Fund Trustee power to: ‘Purchase real estate’, ‘Borrow finance’ and ‘Secure the repayment of borrowed money’.
  • Because the single objective of your SMSF is to secure funds for your retirement, there are strict rules regarding property purchase and these are detailed in the Superannuation Industry Supervision Act 1993 (SIS Act).

Once you have set up your SMSF, you’re effectively in charge of it including reporting responsibilities. Ensure you understand this approach in full and get professional advice with our experienced team. Speak more about this with Simplify Finance.

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Let’s get your finances in order!

To provide you with a guide to how much you may be able to borrow, try our ‘borrowing power’ calculator. This considers your estimated income and expenses to determine an indicative maximum loan amount, to help you with your property search.

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Looking for an answer?

What is SMSF lending?2023-09-04T10:05:36+10:00

SMSF lending, or self-managed super fund lending, allows an SMSF to borrow money to invest in property or other assets. The loan is secured against the asset that is being purchased, and the SMSF is responsible for repaying the loan with interest. Unlike traditional home loans, SMSF home loans are structured to comply with the Australian Taxation Office (ATO) regulations regarding self-managed super funds. These loans can be used to invest in residential properties that align with your retirement strategy.

Learn more by reading our comprehensive guide to SMSF lending.

How does it work?2023-07-17T15:23:15+10:00

When a self-managed super fund takes out a loan, the lender will usually require the SMSF to set up a limited recourse borrowing arrangement (LRBA). This is a special type of trust that is used to hold the asset that is being purchased. The LRBA protects the lender in the event that the SMSF defaults on the loan, as the lender’s only recourse is to the asset that is held in the LRBA.

How do I apply for an SMSF loan?2023-08-17T16:59:34+10:00

Before you can apply for an SMSF loan, we recommend talking to a mortgage broker so you can better understand how a self-managed super fund works in your circumstances. Simplify Finance aims to provide excellent service, offering our services for a small engagement fee. If you are interested in finding out more about SMSF borrowing, book a call with us or fill out our contact form.

Who is eligible for SMSF lending?2023-11-15T12:51:18+11:00

The eligibility criteria for SMSF lending include the following:

  • Duration of super fund: We can start the process as soon as the SMSF is established.
  • Minimum balance: The SMSF must have a minimum balance of $50,000, but we generally recommend between $200,000-$250,000 to start the process.
  • Repayment ability: The SMSF must have a sound investment strategy and have the financial capacity to repay the loan.
  • Investment suitability: The asset that is being purchased must be suitable for SMSF investment and the loan must be secured against the asset that is being purchased.

The lender may also have additional criteria that the SMSF must meet. It is important to note that the ATO has strict rules governing SMSF lending, and not all SMSFs are eligible to borrow money. If you are considering taking out an SMSF loan, it is important to consult with a financial advisor to ensure that you are meeting all of the requirements.

To learn more about self-managed super fund loans, speak to us about it.

What are the different types of SMSF lending?2023-08-04T14:24:57+10:00

There are several types of SMSF home loans available:

  • Variable Rate Loan: The interest rate on this loan fluctuates with market conditions, potentially offering flexibility in repayments.
  • Fixed Rate Loan: With a fixed-rate loan, the interest rate is locked in for a specific period, offering certainty in repayments.
  • Combination Loan: This loan type allows you to split your loan into multiple portions, some on a fixed rate and others on a variable rate.
What are the benefits of getting an SMSF loan?2023-08-04T14:13:32+10:00

The benefits of getting an SMSF loan include:

  • Increased investment opportunities: SMSF loans can help you to invest in assets that you would not be able to afford to purchase outright. For example, you could use an SMSF loan to purchase a property or other investment asset.
  • Tax benefits: There are some tax benefits associated with SMSF lending. For example, you may be able to claim the interest on your SMSF loan as a tax deduction.
  • Asset protection: If you default on your SMSF loan, the lender’s only recourse is the asset that is being purchased. This means that the lender cannot go after your other assets, such as your personal property.
  • Flexibility: SMSF loans offer more flexibility than traditional home loans. For example, you may be able to use the loan to invest in a variety of assets, and you may be able to negotiate the terms of the loan.

However, it is also important to take associated risks into account. To learn more about SMSF lending, book a call with us or fill in our contact form.

What are the costs involved with SMSF loans?2023-08-04T14:12:42+10:00

There are a few costs associated with SMSF loans such as fees, interest and taxes. The fees you may be required to pay include application, establishment or exit fees.

The interest rate on an SMSF loan will vary depending on the lender and the terms of the loan. However, in general, SMSF loans tend to have higher interest rates than traditional home loans. This is because SMSF loans are considered to be a higher risk, as the lender is not protected by the government guarantee that applies to traditional home loans.

Another cost you may be required to pay include taxes such as stamp duty. However, before jumping into opening a self-managed super fund, it is important to consult a mortgage broker to ensure you are making the right decision for your individual circumstances. To learn more about SMSF lending and how it may fit into your financial plan, speak to us.