SMSF property investment

An SMSF property guide for AU trustees: residential versus commercial, borrowing rules, costs and compliance, with calculators and next steps for Sydney, NSW.

Is SMSF property right for your fund?

SMSF property can suit trustees with a sufficient balance, stable contributions and a long time horizon who accept concentrated, illiquid investment. Commercial property can be leased to your business; residential property cannot be used by related parties. Trustees in Sydney, NSW and Australia should compare costs and diversification against other options before buying.

Residential versus commercial

Commercial property can be leased to a member's business at market rent. Residential property must be leased to unrelated parties.

Borrowing adds rules

Loans must be limited recourse, held through a separate trust and used for a single acquirable asset.

Exit planning

Consider how the fund will pay pensions and what happens when a member dies or leaves.

Frequently asked questions

What balance do I need?

There is no legal minimum, but costs make small balances hard to justify.

Can I renovate SMSF property?

Repairs and maintenance are allowed; improvements funded by borrowing are restricted.

Can two funds co-own property?

Yes, as tenants in common, subject to rules.