Using Your SMSF to Invest in Property: A Smart Move for Tech Professionals
- Mo Shouman
- 6 days ago
- 5 min read
If you're a high-earning tech professional, chances are you've thought about buying an investment property. But did you know you can do this using your superannuation? A Self-Managed Super Fund (SMSF) lets you invest in property using your retirement savings, which could be a more tax-efficient and strategic option from buying it under your personal name —especially if you’ve hit your borrowing limit personally.
Many people hit a wall when trying to borrow more under their own name. Banks may limit how much you can borrow based on your income, existing loans, and overall risk. But an SMSF works differently. It’s a separate structure with its own borrowing rules and credit assessment. That means even if you're maxed out personally, your SMSF might still be able to buy property.ial, here’s the top five mistakes you should watch out for—and how to avoid them.
With the help of a financial adviser and proper legal structure, your SMSF can use something called a Limited Recourse Borrowing Arrangement (LRBA) to buy real estate. This can be residential property or commercial property—even your own office, if done the right way. And since the loan is “limited recourse,” only the property itself is at risk if things go wrong, not the rest of your super.
But the biggest benefits of this strategy go beyond just owning property. By using your SMSF, you can create several income streams, pay off debt faster, enjoy big tax savings, and grow your retirement wealth more effectively.
Lets break it down
Four Ways Money Flows Into Your SMSF
Your SMSF doesn't rely on one single income source. It brings in money from several places to help cover costs and build wealth:
Your Super Contributions – As an employee, you’re regularly contributing to your super through your salary (before-tax) and possibly extra top-ups (after-tax).
Your Partner’s Contributions – If you and your partner are both members of the SMSF, you can combine your super to make larger investments and share the benefits.
Rental Income from the Property – The property generates rent, which goes straight into the SMSF to help cover loan repayments and other expenses.
Returns from Other Investments – Any leftover funds in the SMSF can still be invested in shares, ETFs, or other assets to bring in extra income.
This mix of income sources creates a solid financial base that keeps your SMSF growing steadily.
Paying Off Property Debt Faster Inside Super
Another big benefit of using your SMSF is the ability to pay off your investment property loan faster than you could outside of super.
Here’s why:
Your super contributions keep coming in regularly.
The rental income goes straight into the fund.
Other investment returns can be used to help repay the loan.
All these sources combine to make repayments more consistent and manageable—especially when compared to using only your after-tax income outside super.
Plus, if your borrowing capacity is maxed out personally, your SMSF might still be able to borrow because the bank looks at the fund's income and assets—not your personal financial situation. That makes this strategy even more helpful for people who are already at their personal borrowing limit.
Why the Tax Savings Matter
One of the biggest reasons people use SMSFs to buy property is because of the tax benefits. Here's how it works:
Rental income inside an SMSF is taxed at just 15% during your working years (accumulation phase).
If you sell the property after holding it for at least 12 months, the capital gains tax is reduced to 10%.
Once you retire and your SMSF is in pension phase, both the rental income and capital gains can be tax-free.
Compare that to owning the same property personally:
Rental income might be taxed up to 47% depending on your income bracket.
Capital gains—even with a 50% discount—can still attract a tax rate of up to 23.5%.
That’s a huge difference—and it adds up quickly over time. Lower tax means more money stays in your SMSF, growing your retirement savings.
Example: SMSF vs Personal Property Investment
Let’s look at a real-world example. Adam is 40, works in tech, and earns $200,000 a year. He and his partner have $300,000 combined in their super and want to invest in a $700,000 property.
Option A: Buy Property Personally
Purchase Price: $700,000
Deposit: $140,000 from personal savings
Annual Rental Income: $28,000
Tax on Rental Income at 47%: $13,160
Net Income After Tax: $14,840
Option B: Buy Property Through SMSF
Purchase Price: $700,000
Deposit: $140,000 from the SMSF
Annual Rental Income: $28,000
Tax on Rental Income at 15%: $4,200
Net Income After Tax: $23,800
That’s a difference of $8,960 every year just from tax savings. Over 10 years, that adds up to $89,600—before considering capital growth or compounding.
Big Picture: Building Wealth with Your Super
Here’s a summary of why using your SMSF to invest in property can work so well:
· You control the investment and can choose exactly what you want to buy.
· You use both your and your partner’s contributions to boost your buying power.
· The income streams are diversified—contributions, rent, and investment returns.
· Debt can be paid down faster using the fund’s steady inflows.
· You get significant tax savings on rental income and capital gains.
· You can keep growing even if your personal borrowing limit is maxed out.
While this strategy has powerful benefits, it's important to note that SMSF property investing comes with legal, compliance, and structuring complexities. Without the right advice, it’s possible to fall into traps that could lead to extra costs or regulatory issues. That’s why professional guidance isn’t optional—it’s essential to ensure your fund is set up correctly and operates within the rules.
With the right advice and professional setup, this strategy can be a powerful tool to help you grow your retirement wealth in a smarter, more strategic way.
Schedule your Financial Clarity Meeting today to find out if this approach is a good fit for your situation.
Let your super do more than just sit there put it to work for your future.
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I hope you found this article beneficial. I’m Mo Shouman, a financial adviser with 20 years of experience helping professionals save on tax and grow their wealth. Book your financial clarity meeting below and discover how you can take your finances to the next level. I’m proud to be the only adviser who provides a detailed assessment of your financial position—whether you decide to work with me or not!