SMSF Loans for Residential
and Commercial properties

The Self Managed Super Fund (SMSF) loan is tailored to provide loans to trustees of authorised regulated Australian Self Managed Super Funds (SMSFs) to borrow for the purpose of purchasing investment property. SMSF can invest in residential or commercial property.
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The ATO has specific rules that apply to property investment in an SMSF, and you need to comply with these, including that the property:
• Is solely for providing retirement benefits to SMSF members, otherwise known as the ‘sole purpose test’.
• Cannot be purchased from a related party of an SMSF member.
• Cannot be lived in by you or other SMSF members or their related parties.
• Cannot be rented by an SMSF member or anyone related to them.
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On a technical note you should also be aware that ATO rules state that SMSF can only purchase an asset - like an investment property - using a 'limited recourse borrowing arrangement' (LRBA). An SMSF loan is a LRBA, which is thereto protect other assets held by the fund.

For more information, read our SMSF Loan Guide or talk to one of our experts.

The Yard SMSF Loan is a property loan used by a self-managed super fund (SMSF) to buy residential or commercial investment property. The returns of the investment (rental income or capital gains on the value of the property) are then retained within the super fund to boost your retirement savings.

The SMSF loan works in a similar way to an investment loan but there are several differences you should be aware of:
• Loans must be supported by personal guarantee(s) required from all members/beneficiaries of the SMSF.
• The security property should be an established residential or commercial property. Brand new builds are acceptable.
• You cannot purchase vacant land or do construction within your SMSF using an SMSF loan.
• Equity cash out or redraw are not available loan features.

The SMSF borrowing power is determined based on the superannuation contributions, rental income of the investment property, other investment income of the SMSF (e.g. dividends) and on-going SMSF expenses. Typically, you can borrow up to 80% of the value of the property - this means you would require to contribute 20% deposit towards your purchase. Yad can also consider SMSF loans with 10% deposit.

Some borrowers will have taken out an SMSF loan that is no longer on a competitive interest rate. In this case, it is worth exploring refinancing your SMSF loan to a lender with a lower interest rate or a product that has features that better suit your needs. As a fully-featured lender, Yard offers low rate SMSF loans with all the bells-and-whistles including additional repayments and 100% offset facility. Ask us about refinancing your SMSF loan today.

Residential SMSF
‍Standard residential investment house, unit/apartment or townhouse. Some exclusions include:
• Vacant Land
• Construction
• Purchase or refinance of owner-occupied properties
• Non arms-length transactions

‍Commercial SMSF
‍Examples of acceptable commercial property include:
• Strata offices and showrooms
• Retail outlets (e.g. shops, restaurants)
• Industrial factories and warehouses
• Medical suites
• Childcare centres, and others

Yard currently has products that do not require a set amount of funds to be leftover in the SMSF after a property purchase. This is also referred to as a liquidity requirement. You can book a call with one of our Loan consultants who will discuss your financial situation and determine whether a liquidity requirement applies.