Self-managed super and property

Self-managed super funds have become a popular way for Australians to build their retirement savings.

In fact they’re now the fastest growing segment of the superannuation market, with over one million of us now counted as members of an SMSF.^

Those members collectively hold more than half a billion dollars in superannuation assets, approximately 16% of which is invested in direct commercial and residential property.^

Property, along with Australian shares (32%) and cash and term deposits (28%), make up the bulk of Australian SMSF assets, according to Matthew McCabe* of Judge Financial Planning.

“Your self-managed fund can have investments in two kinds of real property. These are commercial property, like a factory, a warehouse or a business leased premises, and residential property such as investment units and houses,” says Mr McCabe

“As with all things superannuation, there are rules around investing in property in your self- managed super fund.

For example, the property must meet the ‘sole purpose test’ of solely providing retirement benefits to fund members.

SMSFs are also prohibited from investing in the family home or holiday home for the personal use of a member.

And a property can’t generally be bought from a related party of an SMSF member (unless it is a business real property), nor can it be lived in, or rented by a fund member or any fund members’ related parties,” he said.

SMSFS can also borrow or gear their super into property, but it must be done under very strict conditions called a ‘limited recourse borrowing arrangement’.

This arrangement can only be used to buy a single asset, such as a residential or commercial property.

You should assess whether the investment is consistent with the investment strategy and risk profile of your fund before committing to a geared property investment.

We are ready to help. We are equipped with the knowledge and expertise to help you get the most out of your SMSF, by showing you how to set up and develop a sound investment strategy that reflects your needs. Contact our office today on 02 4032 7934, or you can send an email to


^ Self-managed super funds: A statistical overview 2012-13, Australian Taxation Office.




*Matthew McCabe is an Authorised Representative of RI Advice Group Pty Limited (ABN 23 001 774 125), AFSL 238429. This editorial is current as at July 2015. The information provided in this document, including any tax information, is general information only and does not constitute personal advice. It has been prepared without taking into account any of your individual objectives, financial situation or needs. Before acting on this information you should consider its appropriateness, having regard to your own objectives, financial situation and needs. You should read the relevant Product Disclosure Statements and seek personal advice from a qualified financial adviser. From time to time we may send you informative updates and details of the range of services we can provide. If you no longer want to receive this information please contact our office to opt out. RI Advice Group Pty Ltd ABN 23 001 774 125 AFSL 238429.