Lending to a self managed super fund

Superannuation legislation allows Self Managed Superannuation Funds (SMSF) to borrow money to invest in property.

And because superannuation is one of the most effective tax investments available, investing in property through an SMSF can save you money in the long run.

If you require a loan for a new or existing property, we may be able to help structure these loans through your SMSF.

How borrowing for an SMSF property investment works?

Seek specialist advice

Lending through your SMSF is complex and certain product and regulatory restrictions apply. It’s important that you seek independent financial planning, legal and taxation advice. We can put you in contact with a NAB financial planner, who will help you decide if this investment strategy is right for you.

Set up a separate security trust

The security trust will buy and hold the property on trust for your SMSF, and provide the guarantee for your loan. This keeps your property investment separate from other SMSF assets.

Find an investment property to purchase

For commercial and rural property, we can lend up to 65% of the property value. The remaining 35% needs to be funded by your SMSF.

For residential property, we can lend up to 70% of the property value. The remaining 30% needs to be funded by your SMSF.

The rental income helps pay off the loan

Rental income flows through to the SMSF and helps pay off the loan and any associated costs (eg. loan interest and expenses). The SMSF has to meet any shortfall.

After the loan is paid off

Once your loan is fully repaid, you have the option of transferring the property ownership from the security trust to your SMSF trust.

For more information, view our guide to self managed super fund lending.

How do I apply?

To borrow through your SMSF, you need to ensure that your SMSF is compliant with superannuation legislation, and has the necessary powers under the trust deed to invest in property.

NAB can help you with a range of lending options for your SMSF. Simply talk to your banker, or call us on 13 10 12.