SMSF property investment
The purchase of real property by a self-managed superannuation fund in Australia, subject to the sole purpose test, the in-house asset rules, and the limited recourse borrowing arrangement (LRBA) rules where borrowing is involved.
A self-managed super fund can acquire residential or commercial real property, but only in a way that satisfies the sole purpose test — providing retirement benefits to members — and the fund’s own investment strategy. Residential property acquired by an SMSF generally cannot be rented to a related party, and related-party acquisitions are prohibited except for business real property at market value.
Where an SMSF borrows to buy property, it must do so under a limited recourse borrowing arrangement (LRBA) that isolates the asset in a separate holding trust and limits the lender’s recourse to that asset. The ATO publishes detailed rulings on what does and does not constitute a compliant LRBA.
Breaches of the SIS Act can make the fund non-complying and trigger significant tax consequences, so SMSF property investment is an area where professional advice before acquisition is genuinely important.
Primary source
Australian Taxation Office (ATO) — SMSFs investing in property →Last reviewed 15 April 2026. Rates, thresholds, and deadlines change — always verify against the primary source before making decisions.