Questions & Answers - Property

No. The Federal Government has announced changes to the SMSF borrowing rules. From 10 August 2026, Limited Recourse Borrowing Arrangements (LRBAs) can no longer be used to purchase residential investment properties. As a result, new SMSF loans for residential property purchases are no longer available.

Yes. Clients of ESUPERFUND are permitted to invest in Australian Commercial Property where the SMSF borrows to fund the Property Purchase. For more on purchasing Commercial Property in your SMSF with borrowings click here.

No. For client convenience and given the complexity involved with Commercial Loans ESUPERFUND offers a Broker Referral Service to source a Commercial Loan for you. For more click here.

Once you have identified a Commercial Property that you would like to acquire with borrowings and submitted a Commercial Loan Pre-Approval with ESUPERFUND, a Loan Consultant will be in contact with you to discuss your options. Once your requirements have been assessed we will provide details of a suitable Commercial Lender for your Commercial loan requirements and in turn advise on the appropriate Rates and Fees at that time.

Once you have identified a Commercial Property that you would like to acquire with borrowings and submitted a Commercial Loan Pre-Approval with ESUPERFUND, a Loan Consultant will be in contact with you to discuss your options. Once your requirements have been assessed we will provide details of a suitable Commercial Lender for your Commercial loan requirements and in turn advise on the Maximum Loan. Typically Lenders for Commercial Property will lend up to 65.00% of the Commercial Property value.

When acquiring Commercial Property with borrowings, the Property being acquired must be purchased using a Security Custodian Trust. This Structure is also commonly referred to an Instalment Warrant Trust or Bare Trust. It is important to understand that the Trustee of the Security Custodian Trust must be a Company. If you have a Company as your SMSF Trustee this Company cannot be used as the Security Custodian Trust Trustee. The Company must be a completely separate Company. Further information on this Structure can be found in our Loan Theory section here.

Yes. A separate Security Custodian Trust must be established for each Property that is acquired using borrowings. You cannot buy multiple properties with borrowings using the same Security Custodian Trust structure. You are permitted to use the same Security Custodian Trust Trustee Company to act as the trustee for each Security Custodian Trust. This saves the cost of establishing multiple Companies.

When acquiring Commercial Property using a Loan, the Property must be purchased in the name of the Security Custodian Trust Trustee Company. The following is noted:

• The Property must be purchased in the name of the Security Custodian Trust Trustee Company.
• All Directors of the Security Custodian Trust Trustee Company must sign the Purchase Contract.
• Please note that the Purchase Contract can be signed with a "subject to finance" clause.
• You must not put the name of your SMSF on the Purchase Contract.

Example:

If the Security Custodian Trust Trustee Company Name is Smith Pty Ltd then the purchaser on your Purchase Contract will be: Smith Pty Ltd. Neither the Trustees of your SMSF or the SMSF itself should be named on the Purchase Contract when borrowing to purchase Property in your SMSF.

No. At this time clients can only borrow to purchase Property that has already been constructed. Clients cannot borrow to purchase Vacant Land.

No. At this time clients can only borrow to purchase Property that has already been constructed. Clients cannot borrow to subdivide Property.

No. Lenders Mortgage Insurance is not payable on SMSF Loans taken out with Liberty Financial.

Yes, you may apply to refinance your SMSF Loan to our panel ledner (Liberty Financial) via your Client Portal here.

The lender's refinance Rates and Fees can be found here.

More information regarding the refinance process can be found here.

Yes. Clients of ESUPERFUND are permitted to invest in Residential Property where the SMSF does not borrow to purchase the Property. This includes investing in Residential Vacant Land. For more on purchasing Property in your SMSF with no borrowings click here.

Yes. Clients of ESUPERFUND are permitted to invest in Commercial Property where the SMSF does not borrow to purchase the Property. This includes investing in Commercial Vacant Land. For more on purchasing Commercial Property in your SMSF with no borrowings click here.

When acquiring Commercial Property with no borrowing, the Property must be purchased in the name of your SMSF. The following is noted:

• The Property must be purchased in the name of the Trustees as Trustee for the SMSF.
• All Directors of the Trustee Company or Individual Trustees must sign the Purchase Contract.
• Please note that the Purchase Contract can be signed with a "subject to finance" clause.

Example 1:

If your SMSF has Individual Trustees (e.g. Barney Spot and Buffy Spot) and the SMSF Name is Spotty Superannuation Fund then the purchaser on the Purchase Contract will be: Barney Spot and Buffy Spot as trustee for the Spotty Superannuation Fund. All Trustees of the SMSF must sign the Purchase Contract.

Example 2:

If your SMSF has a Company Trustee (e.g. Spotty Pty Ltd) and the SMSF Name is Spotty Superannuation Fund then the purchaser on the Purchase Contract will be: Spotty Pty Ltd as trustee for the Spotty Superannuation Fund. All Directors of the Company Trustee must sign the Purchase Contract.

Clients of ESUPERFUND are not allowed to invest in overseas property. The rationale for disallowing overseas property investments is that overseas countries in most instances will not recognise the SMSF as the purchaser of the Property. This means that the Property is invariably purchased by clients in their personal names with SMSF monies. This is tantamount to a super withdrawal and using the monies to acquire the asset in the Trustees personal name. The ATO would not accept that the owner of the asset is the SMSF in this case and where the monies accessed were preserved, the Fund would be severely penalised for illegal access of super benefits. Other reasons for disallowing overseas property are the difficulty in ascertaining who is tenanting the Property as well as the additional complexity in converting rent and expenses from the overseas currency to Australian currency. This added level of complexity is outside the scope of our offering.

The Rent from the Property Investment must be banked into the SMSF Bank Account.

The Expenses for the Property Investment must be paid from the SMSF Bank Account.

No. There are no additional compliance fees payable to ESUPERFUND by clients who invest in Residential or Commercial Property with their SMSF whether they borrow or not. Our annual fee remains at per annum.

Information such as Rental Income and Expenses will be tracked by ESUPERFUND through the Transaction Bank Account where all Income will be banked and expenses paid in relation to the Property. Where additional information is required (such as the Property Purchase Contract) we will request this from you as part of the annual Checklist Process.

Yes. Clients who have acquired a Residential or Commercial Property in their SMSF may be able to claim tax deductions for depreciable items including carpets, furniture, fittings and so on. A Tax Depreciation Schedule for the Property can be used to substantiate depreciation claims. Please note that the Tax Depreciation Schedule must be prepared by a Quantity Surveyor. A Tax Depreciation Schedule is a document that lists all the Properties Depreciable Items, their effective life and the dollar value you can claim against your SMSF Income. For example if your annual depreciation claim was $5,000 you will save $750 in tax annually (i.e. $5,000 x 15%).

No. An SMSF cannot transfer (or sell) an asset owned by a Member (or an associate of a Member including family members by blood or marriage or entities controlled by the Member) to the SMSF unless the transfer is specifically allowed by legislation. Residential Property is not specifically allowed to be transferred by legislation.

Yes. An SMSF cannot transfer an asset owned by a Member (or an associate of a Member including family members by blood or marriage or entities controlled by the Member) to the SMSF unless the transfer is specifically allowed by legislation. Business Real Property (i.e. Property that is used wholly and exclusively in one or more businesses such as Commercial Property) is specifically allowed to be transferred from a Member (or an associate of a Member including family members by blood or marriage or entities controlled by the Member) to an SMSF at market value. However you will need to consider Capital Gains Tax and Stamp Duty Implications prior to making this transfer. See here for more.

No. It is expressly forbidden for an SMSF to invest in the Family Home of a Member (or an associate of a Member including family members by blood or marriage or entities controlled by the Member) irrespective of whether commercial rental is paid.

No. It is expressly forbidden for an SMSF to invest in a Holiday Home used periodically by a Member (or an associate of a Member including family members by blood or marriage or entities controlled by the Member) irrespective of whether commercial rental is paid.

Residential Property acquired by an SMSF must be rented out to third parties unrelated to you. This means you cannot rent a Property to family including parents, siblings, children or your spouse. You can however rent the Property out to unrelated friends. Commercial Property acquired by an SMSF (i.e. Property that is used wholly and exclusively in one or more businesses) can be rented out to any party including to you or an entity associated to you to the extent that commercial rental is paid.

A single asset strategy may be adopted by the Fund if the asset proposed to be invested in is considered by the Trustee to satisfy the Investment Objectives and provided that the Trustees have considered the relevant Concentration Risk. By law, SMSF trustees must have an investment strategy which has regard to diversification. Investment decisions are a matter for SMSF trustees and it may be prudent to seek financial advice.