The steps to buying a property with an SMSF using a loan are as follows:

Before spending time and money setting up an SMSF, speak to a mortgage broker specialising in SMSF loans to understand the following:

Most mortgage brokers don't specialise in SMSF loans. Contact Grow for a referral to a specialist broker who can assist you.

When you've decided to set up an SMSF to buy property, you may begin the setup process with Grow.

The SMSF setup process is as follows:

Note that it's possible for some of the above steps to happen at the same time as other aspects of the SMSF property-purchase process.

For example, you can research potential properties and even enter into contracts while waiting for your super monies to be transferred to your SMSF.

The cost of setting up an SMSF to buy property is listed on our website here: SMSF setup fees.

You pay the SMSF setup fees personally (e.g. via credit card).

The fees can be reimbursed once your SMSF is up and running.

When setting up an SMSF to buy property, you must have a company trustee and NOT use individual trustees. This is because most SMSF lenders only provide a loan where the trustee is a company.

Expect at least four weeks to set up an SMSF from start to finish. A typical timeline is as follows:

When your SMSF is up and running, and you are ready to buy property, the bare trustee company (aka holding company) must be set up.

You can order your bare trust and trustee company online:

This is a second company and is different to the SMSF trustee company. This company will be the legal owner of the property and hold the title on behalf of the SMSF, which is the beneficial owner.

Once the bare trustee company is set up, you can sign the purchase contract for a property (except for properties in QLD and the NT).

The name on the contract for an SMSF purchasing property with a loan (LRBA) varies depending on the state or territory the property is located:

TABLE LAST UPDATED: 18 January 2023.

*QLD, WA and NT purchases should sign their bare trust documents BEFORE of the same day as entering into a contract.

Once the contract is signed, provide a copy to Grow, as we will need the property details to prepare the bare trust documents.

Pay the deposit required from the SMSF bank account, or pay it out of your personal funds, provided the SMSF repays you as soon as possible.

The initial and final deposits must be paid from SMSF monies to help demonstrate the SMSF is the beneficial owner.

SMSF lending and finance approval is more complex and typically takes longer than a regular investment property purchase.

For this reason, the following extended timeframes are suggested when purchasing via an SMSF using borrowings:

If you've obtained (conditional) pre-approval for your SMSF loan, you can use include 21 days for finance and 30 days for settlement.

When you sign a contract in the name of the bare trustee company, you've created a trust.

A trust is a relationship where a trustee holds an asset on behalf of a beneficiary. For example, the bare trustee company holds the property title on behalf of the SMSF as the beneficiary.

The bare trust deed (also known as holding trust deed or custodian deed) confirms the relationship between the bare trustee company as the legal owner of the property and the SMSF as the beneficial owner.

To obtain your bare trust documents, email the signed contract to Grow. We will prepare the bare trust deed and minutes and send them to you for signing via DocuSign.

Sometimes, it may be required to sign a hard copy via wet ink signatures where the lender doesn't accept electronically signed documents (rare).

Remember, for QLD and NT property purchases, you must provide details of the proposed property before the purchase contract is signed.

*Bare trust documents can be signed and dated the same day as the contract date.

Although some jurisdictions allow a bare trust deed to be executed after settlement, because signed documents must be provided to SMSF lenders for finance approval, you will need to sign the bare trust documents shortly after signing the purchase contract.

Once you've signed the purchase contract and bare trust documents, you must liaise with your mortgage broker or SMSF loan provider and complete all necessary steps for finance approval.

Most lenders require a letter from the SMSF accountant confirming ongoing fees and contribution levels. If required, please contact Grow and provide details of what is required.

Note that Grow never provides personal finance advice; therefore, we cannot assist you if you choose an SMSF lender that requires a Statement of Advice (SoA) or sign-off from a financial adviser.

The mortgage brokers Grow works with understand that many people who use their super to buy property via an SMSF do not seek, or require, financial advice.

After the finance is approved, you must make the final deposit for the property purchase. Make this payment from the SMSF cash account.

Buying a property requires payment of many fees and expenses. Any of the following should be paid from your SMSF bank account and narrated in the transaction description:

If your SMSF doesn't have cash available to pay any of the above fees, it's possible to pay them personally and later reimburse them from the SMSF cash account.
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Any expense you pay that is NOT reimbursed will be considered a personal contribution to the SMSF.

If you've followed all the prior steps correctly, your SMSF property purchase settlement should occur without complications.

Ensure you transfer the required amount from your SMSF cash account to your solicitor's trust account before the scheduled settlement date.

Contact your solicitor via phone to confirm their trust account details before making payment because scammers and hackers are known to target property buyers with fake trust account details. Your bank typically won't be able to recover your money if you initiate a payment to a scammer account, so please be very cautious.

Assuming your SMSF uses a Macquarie Cash Management Account (CMA), you have a $100,000 daily payment limit when setting up the Macquarie Authenticator App.
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Where you need to make a payment over $100,000, contact Grow, and we can trigger an Adviser Initiated Payment of up to $500,000,
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If you use a different bank, contact them for instructions on making larger one-off payments to your solicitor's trust account.

After your SMSF property settles, it's a great time to gather all documents relating to the property purchase into one place or folder.

Refer to the following help article for a list of documents we will need for your SMSF accounts and audit:

Depreciation is one of the biggest tax deductions available to SMSF property investors and can boost your cash return by thousands.

We recommend you obtain your SMSF property depreciation schedule from DuoTax:

Please note that Grow doesn't receive any referral fees or commissions from DuoTax.

Update your SMSF investment strategy document to reflect the purchase of property:

There is a misconception that running an SMSF is complex and time-consuming. It doesn't have to be.
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Most councils, insurers and body corporates enable you to set up automatic direct debits for payments of rates, fees and levies. It's recommended you set up these automatic payments and also elect to receive these notices and statements electronically.

If you have questions not covered in this support article or have any feedback, please get in touch with Grow, and we can update as required.