February 6, 2026
How Australian investors are buying property with an SMSF in 2025 − Go to checklist
With cost of living stabilising and interest rates cooling off, many Australians are looking deeper into their portfolio to find opportunities to build their future wealth. One strategy that’s getting a lot of attention in 2025 is buying property through a
self-managed super fund (SMSF).
If you’re curious about how it works, this checklist will walk you through the key points – from the rules to the rewards – so you can move forward with confidence.
1. Get the basics right
- What can you buy?
- Residential property: Only if you’re buying from someone you’re not connected to. You (or your family) can’t live in it or rent it.
- Commercial, rural, or industrial property: Allowed – and you can even lease it back to your own business, as long as you’re paying market rent and keeping it all above board. (ATO – SMSF investments)
- The Sole Purpose Test: Your SMSF must exist purely to fund your retirement. Use it for anything else, and you risk big penalties. (ATO – Sole Purpose Test).
2. Is your SMSF ready for property?
There’s no official minimum balance, but most experts say you’ll need at least $175k–$200k in your fund to make it worthwhile.
3. Borrowing through an LRBA
A
Limited Recourse Borrowing Arrangement (LRBA) lets your SMSF borrow to buy property. The property sits in a separate “bare trust” until the loan is paid off. In case of a default, the lender can only claim againts the property – not your other super assets.
A few rules to remember:
- It must be one single property. Multiple titles? Each one needs its own trust and loan.
- Any upgrades or renovations must be paid for with the SMSF’s own money – no borrowed cash allowed.
4. Keep it compliant
- Record keeping : Make sure all the expenses for the property are paid for by the SMSF and maintain property receipts for tax purposes
- You’re responsible for all audits and filing annual tax returns. (ATO – Annual obligations).
5. 2025 changes you should know
6. The ups and downs
- Why it could be a good move:
- More control over your investments.
- Tax advantages – sometimes even tax exemptions in retirement.
- Business owners can rent commercial property to their own company.
- Why you might think twice:
- Higher costs – loans usually have higher interest rates, and SMSFs have setup and running costs.
- You are solely responsible for all decision making and ensuring ongoing compliance
- Compliance can be heavy – and mistakes can be expensive.
7. The quick checklist
- Check if your fund’s balance is sufficient.
- Consultant an accountant to seek advice on SMSF structure and cost estimation
- Consult a financial advisor and create an investment strategy.
- Get proper property valuations and make sure your purchase is at arm’s length.
- Keep enough cash in the fund for any ongoing costs.
- Work with a mortgage broker who understands SMSF lending
- Stay on top of audits, GST, and annual returns.
- Watch for post-July 2025 rule changes.
At
Kian Mortgage Solutions, SMSF property loans are our speciality. We’ll guide you through structuring your loan, staying compliant, and planning for the future – so you can grow your property portfolio without the stress.
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