SMSF Property Purchase Guide

Step-by-step guide to purchasing an investment property through a Self-Managed Super Fund.

Setup & Compliance

Statement of Advice (SoA)

See a Financial Planner to get a Statement of Advice. (~2 weeks, $1,850 (incl. GST))

Not mandatory but recommended for compliance and audit trail.

Open Corporate Trustee + Super Fund Deed

Establish a Pty Ltd company as corporate trustee and create the SMSF trust deed. (1–2 weeks, $1,500 + GST)

Get the Corporate Trustee + Super Fund Deed done upfront so the fund is ready to invest. The separate Bare Trust (for the property loan) is set up later, at property acquisition — its deed needs the property address.

Apply for ABN & TFN

Apply for an Australian Business Number and Tax File Number for the SMSF. (1–2 weeks, Included)

Print, Attest & Witness Deed

Print the SMSF deed and have it attested and witnessed for bank account opening. (1–2 days, Nil)

Required by CBA (and most banks) before opening the SMSF bank account.

Open SMSF Bank Account

Open a dedicated bank account in the name of the SMSF (e.g. CBA). (1 week, Nil)

Review / Adjust Life Insurance

Review your existing life insurance arrangements and adjust cover as needed for the SMSF structure. (Ongoing, Varies)

Get ATO Compliant Status

Ensure the SMSF is registered and has compliant status with the Australian Taxation Office. (2–4 weeks, Included)

Fund Transfer & Pre-Approval

Rollover Super Funds

Rollover your existing superannuation (e.g. from AMP) to the new SMSF bank account. (3–10 business days, Nil)

Confirm rollover is complete before making any property offers.

Notify Employer

Send email to your employer to redirect monthly super contributions to the new SMSF bank account. (1 pay cycle, Nil)

Start Pre-Approval Process

Engage a lender to begin the SMSF loan pre-approval process. (2–4 weeks, Nil)

Property Acquisition

Identify the Property

Search and identify a suitable investment property. (Varies, Nil)

Do NOT sign the contract until the Bare Trust and its Corporate Trustee are set up — that's the next step, and the bare trust deed needs this property's address.

Set up Bare Trust and Corporate Trustee

Establish the bare (holding) trust + its corporate trustee to hold the property under the SMSF loan (LRBA). (1–2 weeks, $1,500 + GST)

The bare trust deed needs this property's address — set it up now, once the property is identified and before signing the contract.

Sign the Contract

Sign the purchase contract, conditional on building & pest inspection and finance approval. (1 day, Nil)

Ensure contract is conditional on B&P and finance.

Building & Pest Inspection

Arrange and complete a building and pest inspection of the property. (1–2 weeks, $400–$800)

Formal Approval

Convert conditional loan approval to formal (unconditional) approval. (1–2 weeks, Nil)

Exchange & Pay Deposit

Sale contract is exchanged. Pay the 5% or 10% deposit. (As per contract, 5–10% of price)

Mortgage Documents

Mortgage documents are printed and signed. (1 week, Nil)

Settlement & Ongoing

Settlement

Settlement occurs, typically 4–6 weeks after exchange. (4–6 weeks, Per contract)

Solicitor Attestation of SMSF Loan

Solicitor to witness, attest, and explain the SMSF loan documents. (1–2 days, $300–$400)

Stamp Duty on SMSF Deed

Pay stamp duty on the SMSF deed through the Office of State Revenue (OSR). (30 days, $750)

Payable to OSR — this is separate from property stamp duty.

Annual Accounting, Audit & Tax

Ongoing annual cost for SMSF accounting, audit, and tax return lodgement. (Yearly, $1,200 incl. GST (1 property) | $2,500 + GST (2 properties))

ASIC + ATO Annual Levy

Annual regulatory levy payable to ASIC and ATO for maintaining the SMSF. (Yearly, $600–$650 p.a.)

Estimated Cost Summary

SMSF property FAQ

Can my SMSF buy a residential investment property?

Yes, provided it passes the sole purpose test (the fund exists solely to provide retirement benefits) and the property isn't acquired from, or rented to, a fund member or their relative. Commercial property has more flexibility — a member's business can lease fund-owned business real property at market rent.

Can I live in the property my SMSF buys?

No — a residential property bought by your SMSF cannot be lived in, or rented, by you, your relatives, or any other fund member and their relatives, at any time, even after the loan is paid off and even at market rent. Breaching this is one of the most common SMSF compliance failures the ATO acts on.

What is a Limited Recourse Borrowing Arrangement (LRBA)?

An LRBA is the only way an SMSF can legally borrow to buy property. The loan is secured only against the single asset held in a separate bare trust — if the fund defaults, the lender's only recourse is that one property, not the fund's other assets. This is why the bare trust and corporate trustee must be set up before signing the property contract.

Do I need a Statement of Advice before setting up an SMSF for property?

It isn't legally mandatory, but most accountants and SMSF specialists strongly recommend one — it documents that the fund's investment strategy (including the property purchase) is appropriate for your circumstances, which matters if the ATO or your auditor ever questions the fund's compliance.

What ongoing costs does an SMSF property have that a personally-owned property doesn't?

An annual independent audit (mandatory for every SMSF, not just ones holding property), the SMSF's own tax return, and the ASIC/ATO regulatory levy on top of the usual property costs (rates, insurance, agent fees, loan interest). Budget roughly $1,800–$3,300 a year in fund-level compliance costs on top of property running costs.