Property SMSF
Purchase residential or commercial property through your self-managed super fund. We provide specialist strategy advice, legal documentation, and ongoing accounting and compliance support for SMSF trustees who want to invest in property the right way.
Invest in Property Through Your SMSF
Property is one of the most popular investment choices for Australian SMSF trustees. The combination of direct asset ownership, rental income taxed at concessional rates inside super, and the potential for significant capital growth makes property an attractive option for trustees looking to build long-term retirement wealth.
But purchasing property through an SMSF is not as straightforward as buying property personally. There are strict rules around what types of property can be purchased, who can use or occupy the property, how the purchase must be structured if borrowing is involved, and how the property must be managed and reported within the fund.
Getting these rules wrong can have serious consequences, from ATO compliance penalties through to loss of your fund’s complying status. Getting them right, with the support of a specialist team, creates a powerful wealth-building opportunity that is difficult to replicate outside of superannuation.
At New Wave SMSF, our accounting, financial planning, and legal teams work together to ensure every property acquisition through your fund is strategically sound, legally correct, and fully compliant from day one.
This information is general in nature. For advice specific to your circumstances, please speak with one of our qualified advisers.
How We Support Property SMSF Investors
We provide end-to-end support for SMSF trustees who hold or are considering property as part of their fund’s investment strategy.
Our services cover:
Property Investment Strategy Advice
We advise on whether purchasing property through your SMSF is appropriate for your circumstances, what type of property makes sense for your fund, and how a property acquisition fits within your overall retirement strategy.
LRBA Setup and Documentation
If you are borrowing to purchase property inside super, we set up the Limited Recourse Borrowing Arrangement correctly, including bare trust documentation, custodian trust structure, and all legal agreements required by the ATO.
Property Contract Review and Conveyancing
We review the purchase contract and manage the conveyancing process to ensure the property is acquired in the correct trustee name and the transaction is completed in full compliance with superannuation law.
Ongoing Property Accounting and Reporting
We manage the ongoing accounting for property held inside your fund, including rental income reporting, depreciation schedules, loan account management for LRBAs, and accurate CGT tracking for eventual disposal.
Business Real Property Advice
Business owners can use their SMSF to purchase the premises from which their business operates, known as business real property. We advise on the strategy, structure the acquisition, and manage the related party lease documentation.
Property Disposal and CGT Planning
When it comes time to sell a property held in your SMSF, we advise on the timing and structure of the disposal to minimise CGT within the fund and maximise the after-tax proceeds retained in your retirement account.
The Rules Around Property in Your SMSF
Before purchasing property through your SMSF, there are several important rules every trustee needs to understand.
Residential property purchased by your SMSF cannot be lived in or used by you, your family members, or any other related party of the fund. It must be used solely as an investment and rented at market rates to unrelated tenants.
Commercial property, including business real property, can be leased to a related party such as your own business, provided the lease is at market rates and properly documented. This makes commercial property particularly attractive for business owners who want to purchase their business premises through their SMSF.
Borrowing to purchase property must be structured as a Limited Recourse Borrowing Arrangement. Under an LRBA, the property is held in a separate bare trust until the loan is fully repaid, at which point it is transferred to the SMSF. Only one asset can be acquired per borrowing arrangement.
Key rules for property in your SMSF include:
- The property must be purchased in the name of the trustee or custodian trustee, not in your personal name
- The acquisition must satisfy the sole purpose test, meaning it must be for the purpose of providing retirement benefits to fund members
- Related party transactions must be conducted at arm’s length and at market rates
- The fund’s investment strategy must specifically address property as a permitted asset class
- All rental income must be paid into the fund and all property expenses must be paid from the fund
Why Specialist Advice Matters for Property SMSF Investing
Property is the most complex asset class to manage inside an SMSF. The combination of strict acquisition rules, LRBA documentation requirements, related party transaction considerations, and ongoing accounting obligations means that mistakes are both easy to make and costly to fix.
Common issues we see when trustees purchase property without specialist support include property held in the wrong name, LRBA documentation that does not meet ATO requirements, related party leases that are not at market rates, and investment strategies that do not specifically address property.
These issues can trigger ATO audits, result in compliance penalties, or in serious cases, force the fund to dispose of the property at short notice.
At New Wave SMSF, we bring together the accounting, financial planning, and legal expertise required to manage property inside super correctly. Every acquisition is handled end to end by our integrated team, so nothing is missed and nothing is left to chance.
Who This Service Is For
Our property SMSF service is designed for trustees who want to invest in property through their fund with proper advice, correct legal documentation, and full compliance. This service is the right fit if you are:
A Business Owner Who Wants to Buy Their Business Premises
You currently lease your business premises and you want to explore purchasing them through your SMSF. This is one of the most powerful strategies available to business owners inside super and we specialise in making it work correctly.
An Investor Looking to Add Property to Their SMSF
You want to purchase a residential or commercial investment property through your fund and you want to do it correctly from the start. We advise on the strategy, handle the legal documentation, and manage the ongoing compliance.
A Trustee Already Holding Property in Their SMSF
You already hold property in your fund but you are not confident the structure, documentation, or ongoing reporting is being handled correctly. We review your current position and bring everything up to standard.
Someone Considering Borrowing to Buy Property in Super
You want to use an LRBA to purchase a property through your SMSF but you are not sure how the structure works or what is involved. We explain the process clearly and manage every aspect of the setup and ongoing compliance.
The New Wave SMSF Difference
Property inside super requires expertise across accounting, financial planning, and law. At New Wave SMSF, all three sit under one roof.
End to End Property Support
From the initial strategy conversation through to contract review, LRBA setup, ongoing accounting, and eventual disposal, we manage every aspect of property inside your SMSF. You deal with one integrated team, not three separate advisers who have never spoken to each other.
Business Real Property Specialists
We have deep experience helping business owners purchase their business premises through their SMSF. We understand the related party rules, the lease documentation requirements, and the strategic considerations involved in using super to own the property your business operates from.
Compliance First, Every Time
Property is one of the highest risk asset classes from an SMSF compliance perspective. We take a thorough, detail-oriented approach to every property acquisition and every annual reporting cycle, ensuring your fund meets its obligations and your investment is protected.
Frequently Asked Questions
Can my SMSF buy any type of property?
Your SMSF can purchase residential property, commercial property, industrial property, and rural property, subject to the fund’s investment strategy and the superannuation rules that apply to each type. The key restriction is that residential property cannot be used by you, your family, or any related party of the fund. Commercial property can be leased to a related party such as your business, provided it is at market rates.
Can I live in a property owned by my SMSF?
No. A property purchased by your SMSF cannot be used or occupied by you, your family members, or any related party of the fund. It must be used purely as an investment asset. Breaching this rule is a serious compliance issue that can result in significant penalties and disqualification of the fund.
Can my SMSF borrow money to buy property?
Yes, but only through a Limited Recourse Borrowing Arrangement. Under an LRBA, the property is held in a separate bare trust while the loan is being repaid. Only one asset can be acquired per borrowing arrangement and the loan must meet specific ATO requirements around interest rates and terms for related party loans.
Can my business lease property from my SMSF?
Yes, provided the property qualifies as business real property and the lease is conducted at arm’s length at market rates with proper documentation. This is one of the most popular strategies for business owners using an SMSF and when structured correctly it provides significant tax advantages for both the fund and the business.
What happens to the property when I retire?
When you move into pension phase, any income and capital gains generated by the property may become tax free inside the fund, subject to your transfer balance cap. When you eventually sell the property, CGT may apply depending on when and how the disposal occurs. We advise on the timing and structure of property disposals to maximise your after-tax retirement outcome.
How is rental income from property taxed inside my SMSF?
Rental income received by your SMSF is taxed at the fund’s concessional tax rate of 15 percent in accumulation phase. In retirement phase, rental income may be tax free. This compares favourably to rental income received personally, which is taxed at your marginal income tax rate.
Ready to Explore Property Through Your SMSF?
Whether you are considering purchasing your first property through super or you already hold property in your fund and want to make sure it is being managed correctly, our team is ready to help.
What Our Clients Say
We are proud to support SMSF trustees and individuals with professional accounting and financial services.
Disclaimer
This information is general in nature and does not constitute financial or legal advice. Property investments carry risk and may not be appropriate for all investors or all SMSFs. SMSF property strategy advice is delivered by New Wave Financial Planning Pty Ltd, an Authorised Representative of NWG Financial Services, AFS Licence No. 538619. Legal documentation and conveyancing services are delivered by New Wave Law. Accounting and tax services are delivered by New Wave Accountants and Business Advisory. For advice specific to your circumstances, please speak with a qualified adviser before acting on any information contained on this page.