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Home Loan Variable: 5.94% (5.95%*) • Home Loan Fixed: 5.79% (6.39%*) • Fixed: 5.79% (6.39%*) • Variable: 5.94% (5.95%*) • Investment IO: 6.14% (6.58%*) • Investment PI: 5.99% (6.61%*)

Self-Managed Superfund for Investment Property


Self-Managed Super Funds and Investment Property (Yes it is possible)

The Mortgage World Australia team helps a fair few of our clients with investment finance and quite a few clients also have a Self-Managed Super Fund (SMSF). Their logic usually goes along the lines of the stock market has its ups and downs, and the real estate market has them too but generally works on a different cycle. It makes sense for them to invest in real estate as well as the stock market as a form of diversification.

The reason they have SMSF is it’s the only way you can own property in your super. Investing in property through super has a number of advantages (and some disadvantages).

For a start, an SMSF can have 6 members who can pool their superannuation (usually this is immediate family members). This could increase the purchasing power you have by combining your capital.

Using your SMSF to buy investment property can be very tax-effective because your earnings are only taxed at 15%. Significantly less than if those same earnings are taxed as personal income. If the property is held for more than 12 months, the Capital Gains Tax rate drops from 15% to 5%.

Of course by having an SMSF you and your financial advisor/planner have direct control of your investments and the results you get rather than relying on a big superfund for your retirement.

You need to speak to a certified financial planner before you decide to do this.

SMSF is not without its risks and drawbacks – for example, you can’t borrow money to improve an investment property. That would have to come from your fund ‘savings.’ Likewise, the contributions and rental income etc. would have to be sufficient to cover any out-of-pocket costs.

SMSF property investments require professional advice and help to set up and execute. 

Finally, getting a good SMSF loan can be quite difficult unless you have a mortgage broker who understands the lending landscape for SMSF’s – it’s a whole different world to the retail mortgage world. For a start, the interest rates on SMSF loans are more like commercial lending rates than residential lending rates. The fees are also typically higher, due to the legal fees involved with vetting the trust deeds. We take all of this into account when comparing SMSF lenders.

If you think this might be an opportunity you’d like to explore more, then call 1300 661 211 or register online at the team at Mortgage World Australia will connect you with the right team to make it happen.

Ask us a question and we will get back to you within 1 working day

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