Buying Property With Your Super? Here's What You Can and Can’t Do

You've probably seen the ads: “Buy a home with your super!” Sounds incredible, right? A way to fast-track property ownership using your retirement savings? But here’s the thing — that statement is technically misleading. While you can buy a house through your super (using a Self-Managed Super Fund or SMSF), you can’t live in it, and neither can your family, so its hardly a home...

So let’s break down what’s true, what’s not, and what you really need to know before jumping into SMSF property investing.

The difference between a House and a Home can be very misleading....

1. Yes, You Can Buy Property With Super — But Only Through an SMSF

If you want to buy residential property using your superannuation, you’ll need to set up a Self-Managed Super Fund (SMSF). This is a private super fund that you manage yourself and it comes with strict rules and responsibilities.

• The property must be for the sole purpose of providing retirement benefits.

• The SMSF must meet specific compliance rules set by the ATO.

• You’ll need professional help. Think accountants, financial planners, and mortgage brokers experienced in SMSF lending.

  
  

2. No, You Can't Live In It, And Neither Can Your Kids

This is where the “Buy a home with your super” claim falls apart. A home implies somewhere you or your family can live. But under SMSF rules:

• You cannot live in the property.

• Your family members cannot live in the property.

• You cannot rent it to anyone related to you.

  
  

The property must be purely an investment. If you want to live in the house one day, you’d need to wait until retirement, wind up the SMSF, and transfer the property out — which comes with tax and legal considerations.

3. No, You Can’t Renovate It Either (Not Like You Think)

If you're thinking of grabbing a bargain and fixing it up, think again. Under SMSF borrowing rules (known as Limited Recourse Borrowing Arrangements or LRBAs):

• You cannot make significant renovations to the property while the loan is in place.

• You can do basic maintenance (like repainting or replacing broken items), but you can’t improve or alter the property in a structural way.

  
  

This means “buy, renovate, and flip” is completely off the table inside an SMSF.

4. You’ll Need a Larger Deposit — Typically 20–30%

SMSF loans are not like regular home loans:

• Lenders usually require higher deposits (most commonly 20–30% of the property value).

• There are fewer lenders in this space.

• The process is slower and more expensive, with setup and ongoing costs for the SMSF.

So while using your super might sound like a shortcut, it’s often more complex and cost-heavy than people expect. There are some lenders who will with a lower deposit, but be prepared for much higher interest rates!

5. What If the Rent Doesn’t Cover the Loan?

This is one of the most overlooked risks. If the rental income doesn’t cover the mortgage repayments, the difference has to come out of your super balance, and fast. Because you can’t tip money in from your personal account, your super fund itself has to make up the shortfall. If the property is vacant, under-rented, or interest rates rise, that can erode your retirement savings quicker than you think.

That’s why it’s critical to find a property with a strong rental yield. Properties like duplexes or multi-dwelling homes can generate multiple streams of rental income, which helps reduce the risk of shortfalls and makes your investment more sustainable within your fund.

6. The Property Must Be Investment-Grade

Because you’re buying via your super for the purpose of long-term wealth, you’ll want the property to:

• Generate strong rental income

• Be in an area with capital growth potential

• Fit within your fund’s investment strategy

  
  

You’re not picking a house you'd love to live in, you’re picking one that performs like a business asset.

7. Why the Confusion? Dodgy Marketing

Unfortunately, the phrase “Buy a home with your super” can be used as a marketing hook by property spruikers or unqualified promoters who either don’t understand the rules or choose to blur the lines to generate leads. Don't fall for these traps.. at the very least, speak with a licensed professional who can give you the full picture.

Final Word: SMSF Property Can Be Powerful — But It's Not a Shortcut

Buying property through your super can be a legitimate strategy to grow your retirement wealth, if done properly, with the right advice and clear understanding of the rules. However, if you’ve been told you can “buy a home with your super,” just know that it’s not the full truth, and potentially a sign to look elsewhere for advice.

Want Real Guidance on SMSF Property?

If you’re considering this path and want advice that’s actually tailored to your situation, not just marketing fluff, let’s have a chat. I’ll tell you what’s possible, what’s not, and what’s in your best interest.