SMSF Loans in Carnegie
Your self-managed super fund can borrow to invest in property – but the rules are strict, the lender options are limited, and the structure has to be right from the start. Getting it wrong can be costly to unwind.
Karthik has experience with SMSF lending and works through the trustee structure, borrowing requirements, and lender options with you so the fund is set up to do what you’re intending it to do.
A recent client story
David and Karen Whitfield from Mount Waverley had $320,000 in their SMSF and wanted to put it to work before they retired. They’d been looking at adding a commercial property to the fund as an income-generating asset but didn’t know where to start. I walked them through the fund structure requirements, corporate trustee setup, and lender options. They settled on a commercial property in Officer that now generates rental income inside the fund.
How it works
Who this suits
Pre-retirement accumulators – if your fund has sufficient balance and you want to add a property asset before you stop contributing, now is the time to explore it.
Corporate trustee funds – SMSF loans require a corporate trustee structure. If your fund uses individual trustees, Karthik will flag this early so you can make the necessary changes before applying.
Residential and commercial property buyers – SMSFs can borrow to buy both residential investment properties and commercial premises, including business owners purchasing their own business premises through the fund.
Existing SMSF holders reviewing strategy – if your fund is sitting in cash or underperforming assets, a property purchase could be worth exploring as part of a broader strategy discussion with your financial adviser.
Common questions
Can my SMSF borrow money to buy property? Yes – through a structure called a Limited Recourse Borrowing Arrangement (LRBA). This lets your fund borrow to purchase an investment property while keeping the loan risk contained to that specific asset. The rest of your super is protected if the loan were to default.
How much do I need in my SMSF to buy property? There’s no legal minimum, but most lenders want to see at least $150,000-$200,000 in the fund to ensure it can cover the deposit, legal costs, and ongoing expenses while maintaining other investments. A fund that’s too thin for the purchase creates serviceability and compliance problems.
Can I live in a property my SMSF buys? No – not for residential property. SMSF residential investments must be arms-length investments with no personal use by members or related parties. Breach of this rule violates the sole purpose test and attracts significant ATO penalties.
Can my SMSF buy commercial property and lease it back to my business? Yes – commercial property is treated differently. Your SMSF can purchase commercial premises and lease them to your own business, provided it’s done at market rate and on commercial terms. This can be a very effective structure for business owners.
What interest rates do SMSF loans carry? SMSF loan rates are higher than standard residential rates, reflecting the added complexity of the limited recourse structure. Rates from specialist lenders generally start around 1% p.a. higher compared to residential loans, subject to LVR and the specific lender.
Which lenders still do SMSF loans? The major banks have largely exited this space. The market is now mainly specialist and non-bank lenders. The lender pool is smaller than for standard residential lending, which is why having a broker who knows this space is important – the wrong application with the wrong lender wastes time and creates credit file inquiries.
Can I renovate a property my SMSF has bought with a loan? Not significantly – while the loan is in place, you can carry out repairs and maintenance but not improvements that change the nature of the asset. You’d need to pay off the loan first before undertaking substantial renovations.
Why Loanset?
Karthik is an accredited mortgage broker operating under National Mortgage Brokers (NMB), Australian Credit Licence 391209, Credit Representative 556382. He works with a panel of 30+ lenders including major banks, regional lenders, and specialist financiers. Based in Carnegie, he meets clients in person, by phone, or via video.
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