How to Use Super to Buy Property: What Every Australian Needs to Know
- WT Capital
- 2 days ago
- 3 min read
As property prices rise and retirement goals shift, more Australians are asking a key question: Can I use my super to buy a property? The answer is yes — if you use a Self-Managed Super Fund (SMSF).
This strategy isn't for everyone, but it can offer a powerful way to diversify your superannuation, build long-term wealth, and take greater control of your financial future.
Understanding the Basics: Superannuation vs. SMSF
Most Australians have their super in a retail or industry fund, invested across diversified portfolios of shares, bonds, and managed funds. These are managed on your behalf, offering little visibility or control.
An SMSF, on the other hand, gives you the ability to directly choose and manage your investments — including direct property, which traditional super funds do not allow.
“SMSFs are the only structure that allows you to invest in direct residential or commercial property using your superannuation balance.” Australian Taxation Office (ATO)
Can You Really Use Super to Buy a House?
Yes — but with some important conditions:
You must set up an SMSF first.
The property must meet the sole purpose test — it must be purchased solely to provide retirement benefits to fund members.
You cannot live in the property, nor can your family.
The property must be purchased at arm’s length — it can’t be from a related party unless it’s a business premises.
So while you can’t use your super to buy your own home to live in, you can use it to invest in residential or commercial property — often with the help of borrowed funds.
Leveraging Borrowing with an SMSF
Through a Limited Recourse Borrowing Arrangement (LRBA), your SMSF can borrow money to help fund the purchase of a property.
This structure allows you to:
Combine your existing super with borrowed funds to increase your purchasing power.
Repay the loan using rental income and contributions made into the SMSF.
Grow your retirement wealth using leverage — just like property investors outside of super.
Tip: Many Australians are surprised to learn they already have enough in super to fund a deposit on a property — they just haven’t explored the SMSF pathway yet.
Key Benefits of Buying Property with Super
Tax effectiveness: Capital gains and rental income are taxed at concessional rates (15% or less).
Control: You choose the property, the strategy, and the tenants.
Stability: Property can provide a counterbalance to volatile share markets.
Diversification: A well-chosen property adds real asset exposure to your super portfolio.
Important Risks and Rules
While the opportunity is powerful, SMSF property investing comes with risks and strict rules:
Compliance matters: Breaching ATO rules can incur penalties and tax implications.
Liquidity: Property is illiquid, so you need to plan for ongoing fund expenses, especially in retirement phase.
Borrowing risk: Like any leveraged investment, property values can go down — so careful due diligence is critical.
It’s essential to seek guidance from SMSF specialists who can structure your fund and investment plan correctly from day one.
Is It Right for You?
Not everyone will benefit from a Self Managed Super Fund. ASIC’s guidance suggests that in some cases it may not be cost-effective for balances under $200,000, though WT Capital’s approach allows clients with as little as $130,000 combined super to get started thanks to efficient structuring.
The decision comes down to:
Your super balance
Your investment goals
Your appetite for control and responsibility
Get Expert Help Before You Leap
Setting up an SMSF and using it to buy property is a regulated process — and one that requires expert guidance. From compliance and finance to property selection and ongoing strategy, it’s important to have a team behind you.
At WT Capital, we specialise in helping Australians unlock their super to invest in property — giving everyday Australians access to strategies once reserved for high-net-worth investors.
Ready to explore your SMSF property strategy?
Get in touch today for a free consultation and personalised property plan.
