Small super balance? Yes you can have a SMSF, and you can use it for an investment property

More people are wanting to take control and be more involved with their retirement planning which is probably why self-managed superannuation funds (SMSFs) are increasing in popularity. In fact according to the Australian Prudential Regulation Authority (APRA), and the Australian Taxation Office (ATO), there are nearly 600,000 self-managed super funds (SMSFs), managing $696.7 billion in assets as at 30 June 2017.

And the great thing is, you can still include property investment in your retirement fund strategies by using a SMSF.

If you are thinking about managing your superfund via a SMSF, there are some considerations.

How much do I need to set up a SMSF?

Traditionally $200,000 has been the cut-off figure for setting up your SMSF, but technology is allowing more players in the field, meaning it can be cost effective to have a SMSF with a much smaller balance.

How much does it cost to set up?

There is a fee associated with setting up an SMSF, and there are some platforms offering to set one up for as little as $275. Plus you will need to factor in an annual fee for accounting and compliance work. Again, this annual fee will differ depending on which platform you use, but some charge as little as $695.

What do I get?

Many platforms offer ongoing accounting and administration for the annual fee, and many offer more services such as free financial advice, and direct access to purpose built SMSF Investment Trading Platform.

How can I use a SMSF to buy an investment property?

SMSFs are what is known as limited recourse loans. This mean, in case of default, the bank can access the investment property and any other property securing the loan.

If your SMSF doesn’t have the assets to purchase a property outright, you can still borrow money from a lender, but there are ratios to consider. Also, you should be aware, SMSF property loans can to be more costly than other types of property loans, so this will need to be factored into your budget.

What else do I need to know?

There are some rules and regulations you’ll need to follow, such as the property:

  • Must meet the ‘sole purpose test’ of solely providing retirement benefits to fund members
  • Must not be acquired from a related party of a member
  • Must not be lived in by a fund member or any fund members’ related parties
  • Must not be rented by a fund member or any fund members’ related parties.

The Australian Securities and Investment Commissions website,, has got all the information you need to know about SMSF and property investment.

Get in touch if you want to know more! As always, we recommend you speak to a financial expert so you can plan your budget, properly consider all the rules and regulations, and any risk involved.

We’ve been helping people realise their financial dreams through property for over 40 years and we’re always looking at ways to help. If you’d like to know more about how SMSF can help you invest in property and our property management services, our talented and experienced team would love to share its knowledge with you.

Give us a call on 02 4956 9777, send us an email to  or pop into our Cardiff office for an informal chat.

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