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A self managed super fund home loan can be used to buy property through your self managed super fund and give your super balance the benefit of property growth.

This article will help you find out how self managed super fund home loans and how they can be used to purchase property and secure your retirement.

The self managed super fund (SMSF) home loan is to borrow money for the purchase of a residential or commercial property.

At Urban Money we offer SMSF home loan solutions that include interest-only repayments for up to 10 years. We can also assist with preparation of the property trust and give you an insight as to how the whole process works.


The best place to start when thinking about buying a property in your super fund is the ASIC website. The Australian Securities and Investments Commission (ASIC) have clear rules when considering the purchase of a property in your SMSF.

The property:

  • Must meet the ‘sole purpose test’ of solely providing retirement benefits to fund members.
  • Must not be acquired from a related party of a member.
  • Must not be lived in by a fund member or any fund members’ related parties.
  • Must not be rented by a fund member or any fund members’ related parties.

However, your SMSF could potentially purchase your business premises, allowing you to pay rent directly to your SMSF at the market rate. (Reference from ASIC)

It is important to remember that although purchasing a property in your SMSF offers a number of tax benefits for your super fund, there are also a number of fees and charges that can reduce your super balance.


Some of the costs associated with an SMSF home loan include:

  • Upfront fees
  • Legal fees
  • Advice fees
  • Stamp duty
  • Ongoing property management fees
  • Bank fees

It is important you weigh up the benefits and costs associated with getting a SMSF home loan. That is why we insist on our customers obtaining independent financial and legal advice before your proceed.


It is important to remember applying for a SMSF home loan is far more complex compared to a standard home loan.

Generally speaking, you’ll find that it might take you about a week or longer to gather the paperwork you need for the application. Your lender will also need at least another week to 10 days to evaluate and accept the pre-approval application.

The current Australian law means you are generally only permitted to purchase an asset with your SMSF using a ‘limited recourse borrowing arrangement’ (LRBA). This means if you default on your loan, the lender cannot seize any of the other assets in your self managed super fund – only the asset that is the object of the loan.

The nature of this type of loan also means you need to consider a lower LVR (loan to value ratio), so you may not be able to borrow as much as you like, as well as a higher interest rate compared to a standard home loan.

Urban Money Lending Manager Geoff Wilson says, “Getting a self managed super fund home loan is not for everybody, and we seriously encourage our customers to seek independent financial and legal advice before they start the process. SMSF home loans are complicated, and the set-up and ongoing cost are generally more complex than a standard home loan. The upside is good property can provide a solid capital gain and security as people transition into their retirement.”

“At Urban Money we are experienced in providing self managed super fund home loan product solutions and have an in depth knowledge of what is required to gain an approval for this type of product, making it easier and far less stressful for our customers,” Geoff adds.

At Urban Money our customers have the choice of from our own SMSF home loan or those offered by other lenders including major banks and non bank lenders. It is important to note not all of the large lenders offer a SMSF home loan option.

This Blog has been written by Gordon Watson, Urban Money - Home Buying Tips


Ryan Simpson is our qualified Gold Coast Home Loan Manager.

Ryan began his career in mortgage finance with Bendigo & Adelaide Bank Ltd as a Customer Service Officer and worked his way up to Branch and Lending Manager at Varsity Lakes prior to joining Urban Money in May 2014.

Ryan has over 10 years knowledge of the financial services industry and during this time at Bendigo & Adelaide Bank Ltd, gained extensive knowledge of home loan structuring.

Ryan prides himself on his customer service skills, ensuring all his clients know the full home loan process from the initial loan application right through to settlement, and will keep you informed along the way to make obtaining your home loan a seamless process.

Ryan lives in Varsity Lakes and services customers from Burleigh to Coolangatta, and from Robina to Hope Island and beyond.

Contact Ryan online or by mobile on 0401 302 654.

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