As more and more people become investment savvy they are becoming aware of the opportunities that revolve around creating a Self-Managed Super Fund (SMSF) to build a healthy retirement fund by investing in real estate.

In 2007, the Australian Taxation Office (ATO) relaxed the rules revolving around borrowing money within an SMSF for the investment property. this created an explosion of property investment taking place via an SMSF. The ATO recently released data advising that 478,000 SMSFs were approximately $493 billion in assets. This is an increase of almost 8% in the number of funds from the previous financial year and approximately 15% from the year to June 30,2010.

In the last five years, the Australian Taxation Office has been fine tuning the laws that revolve around using an SMSF to invest in the real estate market. In May 2012, the ATO published their final ruling regarding how you borrow money within an SMSF for property investment.

You can only borrow money to invest in real estate within an SMSF via what is called a Limited Recourse Borrowing Arrangement (LRBA). LRBAs have been put in place to protect the SMSF by limiting a lender’s recourse to the single asset the money was borrowed against, thus protecting the other assets held within the SMSF.

Rules and Guidelines around this Type of Investment

It is important to seek professional advice when setting up your SMSF. You must not sign a contract until your SMSF is in place and you must ensure the purchaser’s name is on the contract correctly and also on all loan documents.

The ATO has also set down some strict guidelines in relation to the investment of property within an SMSF. For example whilst you are able to buy ‘off the plan’ properties which are still to be built, you cannot purchase vacant land with the view to building on that land. Likewise, if you purchase a residential or commercial property, you may renovate to maintain a property but you cannot improve a property in any way.

Searching for the Right Property

When looking for help with your self managed super fund property investments, the Fountain Property Group are the professionals to consult. Their team of industry experts in the finance, accounting and legal fields are able to offer sueprb guidance.

Fountain Property Group does the due diligence for you and can offer fully researched properties in many areas to suit each buyer’s requirements.

Contact them now at to see how.


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Dorian Traill is the current Director of Grand Capital Finance Group and Fountain Property Group. He specialize in home loans for people as well as helping them build wealth through quality investment properties that ultimately lead to long term financial freedom.