(02) 8539 7233 info@polaris.com.au
SMSF Purchasing Residential Property
When you have time on your side, it’s not how much you earn, but how much can you really save.

We can help you maximise the growth of your SMSF residential property investment.

Why an SMSF?

Using your super to buy property(SMSF) gives you access to tax incentives for investing in property. But it’s essential to get the structure to meet the ATO’s strict borrowing rules and to allow your investment the scope to flourish.

Polaris will give accurate, informed advice based on years of experience across all stages of the SMSF buying process. And because we have our own credit license, we have access to some of the most competitive loans on the market.

Our goal is to ensure your investment continues to thrive long after settlement.

SMSFs can use borrowed monies to purchase a single asset, or a collection of identical assets that have the same market value. The SMSF trustees receive the beneficial interest in the purchased asset but the legal ownership of the asset is held on trust (the holding trust).

The upside is that with an LRBA, your whole super fund is not at risk if the loan is defaulted. There are also restrictions on the way a debtor can recover their funds.

House with balcony facade

Before you leap in you need to ask yourself:

If you use your SMSF to buy property, what sort of property should it be?

What do you do if you don’t have an SMSF?

Is it worthwhile setting up an SMSF to purchase property?

What are the advantages?

There are significant advantages to having a property in an SMSF, including tax – your super fund will be taxed at 15 per cent – which is considerably lower than most people’s personal tax rates.

Your super fund will be taxed at a lower rate and the capital gains tax may be discounted.

If the property is sold during the accumulation phase, the capital gains tax is calculated at a discounted rate. If the asset is sold while the super fund is in pension phase, it’s tax free.

However, there are a few things to bear in mind if you plan on setting up an SMSF specifically to buy property, whether it’s residential or commercial.

Residential purchase in an SMSF

It’s important to note that you can’t buy a residential property to live in, or for any family member to live in.

You can’t buy property through your SMSF if you intend to live in it.

There’s a condition that the SMSF trustee, its members, or any relatives can’t benefit from the property.

The property purchase must be for the sole purpose of supporting the SMSFs investment strategy in building wealth for retirement.

three storey apartment facade

Don’t have enough savings in super?

If you’re looking for a way to buy a residential property but your super fund doesn’t have enough money, or you don’t want to go through an LRBA, there’s another option you can explore:

A Tenants In Common (TIC) arrangement would allow you to split the borrowing across your family home and your super fund.

For example, if the property you want to buy is $400,000, with a TIC, you could borrow $200,000 against your family home and use $200,000 from your super fund.

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* Terms and conditions apply

The information presented is general in nature and does not take into account your personal goals and objectives. This information does not represent financial product advice. You should always seek independent legal and financial advice before making a decision in relation to a financial product. Read the Product Disclosure Statement (PDS) before making a decision.

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Polaris Home Loans Pty Ltd

1300 799 103 


Endeavour House, Ground Floor Suite 204, 3-5 Stapleton Avenue Sutherland NSW 2232