Your common SMSF home loan questions answered

By Marie Mortimer | 25 Oct 2021

Promoted by loans.com.au

If you have a self-managed super fund (SMSF) and you've got a sizeable amount sitting in your super, you may have considered getting an SMSF home loan to purchase a property.

It could be a great investment opportunity, but it's also a complex product that needs research and professional advice. 

At loans.com.au, we offer competitive SMSF home loan rates and we often see common questions come up on SMSF home loans time and time again. I'm here to answer some frequently asked questions about SMSF home loans which I hope you find useful as you do your research when considering if SMSF is right for you.

What is an SMSF? 

Your SMSF is a private superannuation fund that allows you to manage your own superannuation investments for your retirement. Not everyone can set up their own superannuation, so understanding the basics is crucial before getting started, and for this, we always recommend speaking to your accountant or financial advisor.

What is an SMSF home loan? ​

Essentially, it's a home loan to assist the SMSF in the purchase or refinance of an investment property, usually a residential property. The returns on the investment, which can either be your capital gains or rental payments, are funneled back into the superannuation fund for your retirement.

How much can an SMSF borrow to buy a property? ​

Up to 80% of the property value (LVR).

Is it a good idea to buy a property with SMSF? ​

This is a matter of opinion, and depends on your investment strategy. The property market has seen prices soar over the last decade, and specifically the last 12 or so months. The capital growth aspect means that purchasing property can be part of a solid investment strategy.

Can you rent out SMSF property to family? 

For residential property, unfortunately, you can't rent out your SMSF property to family. 

Can I live in a property owned by my SMSF? 

​The short answer to this is no. There are some restrictions when it comes to any property bought with an SMSF loan, namely that you can't construct a new home, nor can you live in the home at any stage until you reach retirement. We recommend for any questions on this you speak to your accountant or financial advisor.

Can you get a house and land package with SMSF?

You can only get a house and land package with your SMSF if it's in a single acquirable asset - per above, they aren't able to get a loan to construct.

Does SMSF pay capital gains tax? 

Yes, your SMSF will be required to pay capital gains tax where applicable, but the rules differ from an individual CGT. Again, we suggest you chat with your accountant or financial advisor to assist with the specifics of this.

How much does it cost to close an SMSF? ​

When closing your SMSF, some costs to consider include, any tax payable and SMSF accounting, auditing, and administration fees for the Financial Year.

If you want a lower rate on your SMSF loan, loans.com.au has some of the lowest rate SMSF loans in the market, and we’re here to help you refinance your SMSF so you can start saving thousands. We have an easy refinance process, no application fee and no settlement fee, and no monthly, annual, or ongoing fees.

For more information on our low SMSF rates, visit our website today.

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Marie Mortimer is Managing Director of loans.com.au, one of Australia's largest online lenders. Since Marie started the business 10 years ago, Marie has grown loans.com.au into a company with $6 billion worth of home and car loans. Marie is dedicated to improving financial literacy for all Australians and is passionate about the FinTech industry in Australia. When she isn't at work, she loves to spend time with her husband and two young children.

loans.com.au is an online lender for home and car loans. For 10 years, Aussies have trusted the locally based loans.com.au team to support them with low home loan and car loan rates, approved quickly through the online loans.com.au app.

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Find out how to use your Super to invest in property

Are you sick and tired of having no control over your super? Did you know that you can use your super to invest in property - and that if you set up a self-managed super fund you can even get a home loan to buy investment properties.

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