SMSF property loans, structured to comply.
Danny arranges the loan side of an SMSF property purchase — the LRBA structure, lender selection, and the Bulimba property file. Your SMSF accountant and financial adviser handle the rest.
- $340Msettled
- 13+ yearsbroking
- 80+lender panel
SMSF lending sits at the intersection of credit broking and superannuation regulation. Danny arranges the loan and matches the file to the right lender on the SMSF panel. The structuring of the fund itself, the bare trust setup, and the suitability of the investment are the work of an SMSF accountant and a licensed financial adviser — not a broker.
Limited Recourse Borrowing Arrangement (LRBA)
SMSF property purchases are structured under the Limited Recourse Borrowing Arrangement provisions of the SIS Act. The asset is held in a separate bare trust (sometimes called a holding trust or custodian trust), and the lender's recourse in default is limited to that single asset — other SMSF assets are protected.
The bare trust is set up by the SMSF accountant or solicitor before settlement. Danny aligns the loan documentation with the trust structure so settlement runs cleanly.
Lender pool and deposit requirements
Most major banks exited SMSF lending in 2018–2019. The active SMSF lending pool today is a smaller group of second-tier and non-bank lenders, each with different policy on minimum deposit (typically 20–30%), minimum SMSF balance, and asset type. Residential investment property is the most common; some lenders also fund commercial property purchases by SMSFs.
Deposit funds must come from the SMSF's existing balance or contributions, not from a personal loan or third-party gift. The fund must also retain enough liquidity to meet ongoing SMSF expenses and member benefits.
Serviceability assessment under SMSF policy
Lenders assess SMSF loan serviceability against the fund's projected cash-flow — rental income (typically shaded to 70–80%), employer and personal contributions, and existing fund income — against loan repayments and SMSF expenses. The contribution-cap rules and member-balance composition affect what each lender will treat as sustainable income.
What sits outside the broker's scope
Whether an SMSF is the right vehicle for property investment, whether members should establish an SMSF in the first place, the wording of the investment strategy, the fund's compliance with SIS Act rules, and the tax treatment of contributions and distributions are all questions for an SMSF accountant and licensed financial adviser. Danny can refer SMSF clients to specialist accountants and advisers when the broker conversation surfaces a gap.
Frequently asked questions
Direct answers to questions Danny hears most often from SMSF trustees considering property investment. General information only — nothing here is personal credit, tax, financial product, or superannuation advice. Speak with your SMSF accountant and licensed financial adviser before making any decision.
What is an LRBA, and why is it used for SMSF property loans?
A Limited Recourse Borrowing Arrangement is the structure permitted by the SIS Act for an SMSF to borrow to acquire a single asset. The asset is held in a separate bare trust, and the lender's recourse in default is limited to that asset — other SMSF assets are protected. LRBA is the only currently legal structure for SMSF property borrowing in Australia.
What deposit does an SMSF typically need to buy property?
Most active SMSF lenders require 20–30% deposit on residential property and 30–35% on commercial property, plus enough liquidity to cover stamp duty, legal costs, and ongoing fund expenses. Specific minimums vary by lender, asset type, and SMSF balance. Confirm current requirements with your SMSF accountant before contracts are signed.
Can a major bank still finance an SMSF property loan?
Most major Australian banks exited SMSF lending in 2018–2019. Today's active SMSF lending pool is a smaller group of second-tier and non-bank lenders. Lender selection is the decisive factor for SMSF deals, and the panel changes from year to year. Danny reads current SMSF policy across the panel before any application is submitted.
What is the minimum SMSF balance to qualify for a property loan?
Most lenders look for a fund balance of around $200,000 minimum after the deposit and costs are paid, though the practical threshold for a sound investment is typically higher. The fund needs enough remaining liquidity to cover loan repayments through vacancy periods, ongoing SMSF accounting and audit costs, and member benefits as they fall due.
Can an SMSF buy a property the members or relatives live in?
No, not for residential property. SIS Act rules prohibit an SMSF from acquiring residential property from, or leasing it to, a fund member or any related party. Commercial property used for a member's business is treated differently — business real property may be acquired from a member at market value, subject to the in-house asset rules. This is squarely an accountant question.
What changes can be made to an SMSF property after settlement?
Under the SIS Act, an SMSF holding a property under an LRBA cannot make improvements that change the character of the asset (for example, extending a single dwelling into a duplex). Repairs and maintenance using fund cash are allowed. Borrowed funds cannot be used for improvements. Material changes typically require the loan to be repaid first. Confirm the specific position with the SMSF accountant before quoting a builder.
Who else needs to be involved in an SMSF property purchase?
An SMSF accountant or solicitor sets up the bare trust before settlement and handles ongoing fund compliance. A licensed financial adviser is generally required to advise on whether the property purchase suits the fund's investment strategy. Danny, as a mortgage broker, arranges the loan side. The four-way coordination between trustees, broker, accountant, and adviser is what makes SMSF deals run cleanly.
Prefer to talk it through?
Or book a coffee with Danny instead.
Thirty minutes on Oxford Street, Bulimba — or by video. No pressure, no spreadsheet homework before you arrive.