Unlocking Property Potential: Using Your Super to Invest in Real Estate
At Turley Property Advocates, we’re often asked by clients whether they can use their superannuation to invest in property and the short answer is yes, but with the right structure and advice. With growing interest in long-term wealth strategies, using your super to invest in property through a Self-Managed Super Fund (SMSF) can be a powerful way to diversify your retirement savings. But like any investment move, it requires careful planning, compliance, and a solid strategy.
What Is an SMSF?
A Self-Managed Super Fund (SMSF) is a private super fund that you manage yourself. Unlike traditional superannuation accounts, an SMSF gives you direct control over where your retirement savings are invested—including in residential or commercial property.
An SMSF can have up to six members and is regulated by the ATO. The key distinction is that every decision you make—every investment, every compliance step—is your responsibility as a trustee.
Can You Buy Property with Your Super?
Yes—under certain conditions. Your SMSF can purchase residential or commercial property, but it must be for investment purposes only, not personal use.
Here’s what the ATO requires:
The property must meet the sole purpose test: it must provide retirement benefits to fund members.
It cannot be lived in by you, any fund members, or their related parties.
It cannot be rented to you, your relatives, or any related party.
If the SMSF borrows to buy the property, it must use a Limited Recourse Borrowing Arrangement (LRBA).
Residential vs. Commercial Property
Residential Property: Your SMSF can buy residential investment properties, but you (or any related party) can’t live in or rent the property. This strategy suits long-term investors comfortable with limited access to the asset before retirement.
Commercial Property: This is often a more flexible option. For example, many business owners use their SMSF to purchase their own commercial premises, then lease it back to their business at market rates. This is legal and often very tax effective provided all dealings are at arm’s length.
The Benefits of SMSF Property Investment
Tax Advantages: Income from the property is generally taxed at 15% in the accumulation phase and potentially tax-free in retirement.
Control: You choose the property, manage the investment, and build a strategy aligned with your retirement goals.
Diversification: Adding property to your SMSF portfolio can provide an asset-backed counterweight to shares and cash.
The Risks and Considerations
Complexity: SMSFs are heavily regulated, and you must comply with strict rules around setup, borrowing, and management.
Liquidity: Property is not easily sold. If you need to pay a pension or lump sum, you may face cash-flow issues.
Cost: There are setup and ongoing costs including legal, accounting, and compliance fees.
Responsibility: You must ensure compliance with super laws, or risk penalties and tax implications.
Why Work with a Buyer's Advocate?
At Turley Property Advocates, we understand the nuances of SMSF property investing. We work alongside financial planners and SMSF specialists to:
Source suitable investment-grade properties (on or off-market)
Navigate compliance rules and borrowing constraints
Negotiate favourable terms that protect your fund’s long-term interests
Conduct due diligence to help minimise risk
Investing through your super isn’t just about buying a property, it’s about securing your financial future. That’s why it pays to have an experienced team on your side.
Thinking about using your super to buy property?
Let’s talk strategy. Reach out to Turley Property Advocates to explore how we can help you take the next step with confidence.