Can I buy a residential investment property through my SMSF?

Answer

You can use your SMSF to buy a residential investment property. However, your fund’s decision to buy the property must be consistent with the sole-purpose test, or to provide benefit to a member’s dependants if the member dies before retirement. The investment return from the property through both rental income and capital growth must be the sole focus for making the investment and you must have no other purpose or motive in mind, such as living in the premises yourself.

There are strict restrictions on who your SMSF can buy the property from and who it can be rented to.

The property cannot be acquired from, or as a general rule rented to, a related party of the fund – the members of the fund and their associates and any standard employer-sponsors of the fund and their associates.

Before using your SMSF to buy property it’s important to understand superannuation law and other relevant law in this area. Importantly, your SMSF’s trust deed must enable the property to be bought and it must be consistent with your fund’s investment strategy. It is also important to ensure your fund has a diversified investment portfolio, adequate liquidity and a divestment strategy.

We recommend that you speak with a financial adviser to help you decide if buying property through your super fund is right for you.

 

Important information

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It’s important to consider your particular circumstances and read the relevant Product Disclosure Statement or Terms and Conditions before deciding what’s right for you. This information hasn’t taken your circumstances into account.

This information is provided by AMP Life Limited. Read our Financial Services Guide for information about our services, including the fees and other benefits that AMP companies and their representatives may receive in relation to products and services provided to you. All information on this website is subject to change without notice.