SMSF property loans.
BUY INVESTMENT PROPERTIES WITH SUPER
Use your SMSF to buy an investment property.
Your superannuation is one of your most valuable assets. An SMSF loan lets your Self-Managed Super Fund borrow money to purchase a residential investment property, with all rental income and capital growth flowing back into your fund to build your retirement savings. As an independent Melbourne mortgage broker, we compare lenders, manage the compliance requirements, and guide you through the entire process from eligibility check to settlement.
What is an SMSF loan?
An SMSF loan allows a Self-Managed Super Fund to purchase an investment property. The property is held in a separate bare trust until the loan is repaid, at which point the title transfers into the SMSF. Rental income and capital growth flow back into the fund to grow your retirement savings.
Why invest in property through your SMSF?
Tax-effective returns
Rental income inside your SMSF is taxed at just 15%. Hold the property for more than 12 months and capital gains tax drops to 10%. In pension phase, both can be tax-free.
Leverage your super balance
Rather than waiting to save the full purchase price, an SMSF loan lets you use your existing fund balance as a deposit and buy a higher-value asset sooner.
Protect your other assets
Because the loan is limited recourse, the lender’s claim is restricted to the property in the bare trust. The rest of your SMSF stays protected.
Diversify your portfolio
Add direct residential property to your SMSF alongside shares and cash, a tangible, growth-oriented asset to balance your retirement portfolio.
Calculate your SMSF loan.
Use our free SMSF loan calculator to estimate your repayments and eligibility for residential or commercial investment properties.
Do you qualify for an SMSF loan?
SMSF loans are tightly regulated by the ATO. Here’s what you’ll generally need:
Your fund
- A compliant SMSF with a trust deed that allows borrowing
- A corporate trustee structure (required by most lenders)
- A fund balance of at least $150,000–$200,000
- Annual ATO returns lodged and an independent audit completed
The property
- A standard residential investment property (house, unit or townhouse)
- Must pass the ATO’s sole purpose test, for investment only
- Cannot be lived in or rented by trustees or related parties
The loan
- A maximum LVR of 80%, a minimum 20% deposit is required
- Serviceability is assessed on SMSF income only, not your personal salary
- A liquidity buffer (typically 10% of the property value) must stay in the fund after purchase
How we help you get there.
SMSF loans involve more documentation, stricter compliance, and specialist lenders that most brokers don’t work with. Our team handles the complexity so you don’t have to, so why should you choose Orange Home Loans as your Mortgage Broker?
Truly independent
We work for you, not the banks. No single lender allegiance, just the right loan for your fund.
Access to specialist lenders
The major banks have largely left the SMSF market. We work with the specialist and non-bank lenders who are still active and competitive.
Local Melbourne expertise
Based in Moonee Ponds, we know the Melbourne market and offer face-to-face appointments on your schedule.
SMSF loans:
Frequently asked questions.
SMSF loans:
Frequently asked questions.
What exactly does an SMSF loan do?
An SMSF loan is a fund that borrows money to buy a single investment property, which is held in a separate bare trust until the loan is fully repaid. Once it’s paid off, the title transfers into your SMSF.
What is a Limited Recourse Borrowing Arrangement (LRBA)?
An LRBA is the legal structure required for all SMSF loans under Australian superannuation law. It limits the lender’s claim to the specific property in the bare trust. If the SMSF defaults, the lender cannot pursue any other assets inside the fund — protecting your broader retirement savings.
How much can my SMSF borrow?
Most SMSF residential loans allow borrowing up to 80% LVR, so a minimum 20% deposit is required. Your fund also needs to cover legal fees, stamp duty, and maintain a liquidity buffer, typically 10% of the property value. A fund balance of at least $150,000-$200,000 is generally recommended before pursuing SMSF property investment.
Can I live in a property my SMSF buys?
No. Trustees and related parties cannot live in or rent a residential property purchased through an SMSF. The property must satisfy the ATO’s sole purpose test, held purely for investment to provide retirement benefits. Breaching this rule can result in serious ATO penalties and loss of compliance status.
Are SMSF loan interest rates higher than standard home loans?
Yes. SMSF loan rates are typically 1.2–1.5% higher than standard investment loans. This reflects the higher risk profile created by the limited recourse structure. Most major banks have exited the SMSF lending market, so the most competitive rates are now offered by specialist non-bank lenders.
Do I need a corporate trustee?
Most lenders require a corporate trustee structure, in which a company acts as the trustee of the SMSF, rather than individual trustees. It simplifies governance and makes the transfer of property title easier once the loan is repaid.
Can I renovate a property bought through my SMSF?
Borrowed funds can only be used for repairs and maintenance, returning an asset to its original condition. They cannot fund improvements like extensions, additions or granny flats. This is a strict ATO rule, and breaching it can have serious consequences for your fund’s compliance.
Can I refinance an existing SMSF loan?
Yes, though fewer lenders offer SMSF refinance products. It can be worth exploring if rates have improved or your circumstances have changed. Orange Home Loans can compare refinancing options across our lender panel to see if switching makes sense for your fund.
What documents do I need?
You’ll typically need:
- Certified copy of the SMSF Trust Deed
- Certified copy of the Bare (Custodian) Trust Deed
- Two years of SMSF financial statements and tax returns
- Six months of SMSF bank statements
- SMSF Investment Strategy document
- ATO compliance confirmation
- Financial planner’s acknowledgment letter (required by some lenders)
How long does an SMSF loan take?
Longer than a standard home loan, the additional documentation and compliance checks take time. The exact timeline depends on how quickly documents are prepared and the lender’s processing times. Orange Home Loans manages the process proactively to keep things moving.
Why use a broker for an SMSF loan?
SMSF loans are among the most complex lending products in Australia. A specialist broker knows which lenders are active, what their criteria are, and how to structure an application correctly. Orange Home Loans compares options across our lender panel, prepares your documentation, and manages the process end-to-end, reducing delays and the risk of application errors.
Does Orange Home Loans help with SMSF loans in Melbourne?
Yes. We’re a Melbourne-based independent mortgage brokerage specialising in SMSF residential loans, based in Moonee Ponds and serving clients across Greater Victoria. We offer free, no-obligation consultations in person or at a time that suits you.