Buying property through a self-managed super fund can be a powerful way to invest for retirement – but it is strictly regulated, and getting the structure right is essential.
This complete guide explains how SMSF borrowing works through a Limited Recourse Borrowing Arrangement, the deposit and fund requirements, the compliance rules, and the specialist lenders involved.
As your local Perth broker, The Finance Yogi arranges compliant SMSF loans and works alongside your accountant and adviser.
Under a Limited Recourse Borrowing Arrangement, your SMSF borrows to buy a single property, held in a separate bare trust until the loan is repaid. ‘Limited recourse’ means the lender’s claim is limited to that property, protecting the rest of your fund.
The arrangement must meet the sole-purpose test, be conducted at arm’s length, and – for residential property – no member or related party can live in or rent the home. Commercial property can often be leased back to your own business.
This guide brings it together and links to the detail on each topic.
SMSF property investing can be powerful, but compliance is non-negotiable and mistakes can be costly.
We keep the structure right, work with your accountant and adviser, and match your fund with lenders who genuinely understand SMSF lending.
These rules protect your retirement savings and keep the fund compliant with superannuation law.
See the detail in can my SMSF buy property and SMSF loan deposit and costs.
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After 10 years inside the Big Four banks, I saw how many Perth families missed out or borrowed with the wrong lender. The Finance Yogi exists to change that - we compare the whole market and explain every number in plain English.
Most SMSF lenders limit residential borrowing to 70-80% of value, so your fund needs a 20-30% deposit plus costs. Commercial property is usually 65-75%, needing a larger deposit.
Lenders also expect a minimum fund balance – commonly around $200,000 or more – and require the fund to keep a cash buffer after the purchase, so it can meet repayments even if rent falls short.
Plan the numbers: get a feel for repayments with our borrowing power calculator, then we confirm your fund’s exact position.
The major banks largely exited SMSF lending years ago, so today it is mostly specialist and second-tier lenders. Their requirements vary widely, and their rates are usually a little higher than standard investment loans.
Beyond the deposit, budget for bare trust setup, legal and conveyancing fees, lender fees, stamp duty, and ongoing fund administration and audit costs.
We know which lenders are active and what each requires. See the full service on our SMSF loan broker Perth page.
The process starts with your fund and its structure. We confirm your fund can support the loan, coordinate the bare trust with your accountant, and match you to an SMSF lender.
Then we arrange approval and manage settlement, keeping the limited-recourse structure compliant throughout.
With your accountant and adviser involved, we complete the purchase compliantly. Explore everything we offer on our finance services page, or start with a free consultation.
Book a free, no-obligation chat and we will check your fund and match you to an SMSF lender.
Source: SMSF and LRBA guidance from the ATO, and super information from ASIC MoneySmart. SMSF rules are complex – seek licensed advice.
