Frequently Asked Questions

The loan repayments should come from the SMSF's bank account. This bank account does not have to be through the SMSF loan lender.

Ultimately, the security asset will be determined by the lender. However, generally residential security or commercial security are acceptable property types for SMSF loans.

SMSF interest rates are generally a bit higher than residential mortgage interest rates. This is because of the complex nature of investing inside a superannuation fund.

No, an SMSF investment loan is strictly non-recourse debt. The loan is taken out by the Custodian/Bare Trust on behalf of the SMSF. Crucially, the liability is restricted solely to the acquired investment property. This means the debt is not listed on your personal credit file, and the lender has no claim over your personal assets or other assets within the SMSF if the fund defaults. This protective feature is central to the LRBA structure and is one of the key reasons why this type of lending is so specialised.

Yes, your Self-managed Super Fund property investment loan can generally be used to purchase a property anywhere in Australia, provided the property meets the lender’s criteria and is considered a “single acquirable asset” under ATO rules. We help you navigate the different legal and valuation requirements that may apply when purchasing interstate, ensuring the structure remains compliant regardless of the state or territory in which the property is located.

Interest paid on an SMSF investment loan is fully tax-deductible against the rental income generated by the property, within the super fund environment. Since the rental income is only taxed at 15% (or 0% in the pension phase), this deduction is highly efficient, maximising the net positive return on your investment inside the fund and accelerating the wealth accumulation process compared to holding the asset outside super.

Once the SMSF investment property loan is fully extinguished, the purpose of the Custodian/Bare Trust is complete. The legal title to the property is then transferred from the Custodian Trustee directly to the SMSF Trustee. At this point, the SMSF holds the asset outright, and all future income and capital gains remain subject to the concessional superannuation tax rates, offering massive tax advantages, particularly in the pension phase.

Yes. Just like personal mortgages, SMSF investment loan rates can be fixed (locked in for a period) or variable (fluctuating with market rates). The right choice depends entirely on your fund’s risk appetite, current interest rate environment, and predicted cash flow. We provide tailored advice on which rate structure best supports your fund’s long-term investment strategy, ensuring stability or flexibility, whichever you prefer.