SMSF loans in Bankstown & South West Sydney
Looking to buy property through your super? We'll guide Bankstown & South West Sydney trustees through the process and find a lender who gets it.
Buying property through your super? We'll help you set up correctly.
Purchasing property through a Self-Managed Super Fund (SMSF) can be a way to grow your retirement savings - but it comes with more rules, more structure, and a few extra steps. Whether you're just exploring the idea or ready to act, we'll guide you through the lending from start to finish.
At Infinity Mortgage Brokers in Bankstown, we work closely with clients, accountants, and financial advisers to make sure your SMSF lending is handled with care, clarity, and compliance.
What's involved in an SMSF loan?
An SMSF loan allows your super fund to borrow money to buy an investment property - typically a residential or commercial property that generates income for the fund. These loans are different from standard home loans. Here's what's typically involved:
- Setting up a compliant SMSF structure (if not already in place)
- Establishing a bare trust or custodian trust to legally hold the property
- Meeting lender requirements specific to SMSF lending (often stricter than regular loans)
- Ensuring the property meets 'sole purpose' and investment strategy rules
- Providing strong documentation of fund performance and contributions
It's a more complex process - but with the right guidance, it's absolutely doable.
Why would I need a broker to purchase in an SMSF?
Getting your SMSF loan structured correctly is essential. This isn't just another property purchase - it's part of your retirement planning. A mistake at the lending stage can affect tax outcomes, compliance, and your ability to borrow again through the fund.
That's why it's so important to work with a broker who understands the lending rules and the long-term implications - not just the paperwork. Whether an SMSF purchase is right for you is a question for your licensed financial adviser, and we work alongside them.
How Infinity Mortgage Brokers can help
We've helped many Australians purchase property through their SMSF - from setting up the right loan to ensuring everything aligns with super fund requirements. Here's what we bring to the table for South West Sydney trustees:
- A clear explanation of your lending options
- Access to SMSF-friendly lenders with competitive rates
- Experience dealing with trusts, SMSF documentation, and compliance issues
- Coordination with your accountant or financial adviser (or referrals if needed)
- End-to-end support to make a complex process feel simple
We won't overcomplicate it - but we won't cut corners either. We take the time to get it right.
Want to know more about buying through your SMSF? Let's talk.
Schedule a free introductory call with us now.
Can an SMSF borrow to buy property in South West Sydney?
Yes, an SMSF can borrow to buy property, but only through a limited recourse borrowing arrangement, known as an LRBA. Superannuation law allows no other way for a self managed super fund to borrow for an asset.
The structure
A separate holding trust, also called a bare trust, is the legal owner of the property. The fund is the beneficial owner, receives the rent and pays the loan. If the loan defaults, the lender's claim against the fund stops at that one property, although lenders usually ask members for personal guarantees.
Residential and commercial rules differ
An SMSF may buy business real property from a member or related party, which is why some business owners use their fund to purchase their own premises. It generally may not buy residential property from a related party. Members and their relatives cannot live in a residential property the fund owns.
Order of events
The fund's trustee and the holding trustee company must exist before the contract is signed, and the purchase must be made in the correct name. The timing of the holding trust deed differs between states, so have your solicitor confirm the order first. Mistakes can create compliance breaches and double duty.
Where to start
Talk to Infinity Mortgage Brokers before you commit to anything. Our SMSF lending service and guide to SMSF property loans explain the set up for South West Sydney trustees.
How much deposit does an SMSF loan require?
An SMSF loan requires a larger deposit than a standard home loan, commonly 20% to 30% for residential property and more for commercial. The fund must also keep cash in reserve after settlement.
Loan to value limits
Lenders cap SMSF loans at a lower share of the property's value than standard home loans.
Liquidity after settlement
Most lenders require the fund to hold a minimum amount in cash or liquid investments once the purchase completes. It covers repayments, rates, insurance, accounting and audit fees through any period without a tenant.
Servicing
The lender counts employer and member contributions and the expected rent, then applies a buffer. Contributions are capped by law each year, so there is a ceiling on how much the fund can support.
Rental return
A reliable rent matters more inside a fund than outside it. Our research on the best suburbs for property investors is a sensible starting point.
An honest assessment
The fund balance needed is larger than many trustees expect. Infinity Mortgage Brokers in Bankstown will say so directly if yours falls short.
What are the rules for a property bought with an SMSF loan?
The rules for a property bought with an SMSF loan are strict, and the penalties for breaching them are serious. The main rules:
• Members and their relatives cannot live in a residential property owned by the fund, not even while paying full market rent
• The fund generally cannot buy residential property from a member or related party
• Business real property can be leased to a member's business, provided there is a written lease on arm's length terms and market rent is paid on time
• Borrowed money can pay for repairs and maintenance, but not for improvements
• While the loan is in place, the property cannot be changed so much that it becomes a different asset
• The purchase must be a single acquirable asset, which complicates properties on more than one title
• Every dealing must fit the fund's written investment strategy
What that excludes
Buying land and building on it under separate contracts is generally off the table while an LRBA is in place. So are subdividing and redeveloping, because they change the nature of the asset.
Who is responsible
These rules come from superannuation law, not lender policy. Compliance is a matter for your accountant, SMSF administrator and licensed financial adviser.
Our role
Infinity Mortgage Brokers arranges the finance for South West Sydney trustees and works with all three. See our guide to SMSF property loans.
What ongoing costs and obligations come with an SMSF loan?
An SMSF loan costs more than an ordinary home loan to set up and to run, and the fund carries its own yearly compliance costs as well.
The loan
Rates are higher. Legal costs are higher because of the holding trust. Some lenders add an SMSF application fee and an annual fee.
The fund
Every year the fund needs financial statements, an independent audit and an annual return to the ATO. The property brings rates, insurance, any strata levies, agent fees and upkeep. None of these stop when the property is vacant.
Cash flow
Repayments must be met from rent and contributions within the legal contribution caps. Plan for gaps between tenants.
Refinancing later
An existing LRBA can be refinanced, but far fewer lenders offer it than offer standard refinancing. Choose a lender likely to remain competitive for years.
A necessary caution
Infinity Mortgage Brokers in Bankstown provides credit assistance. We are not licensed to say whether buying property in super suits your retirement plans. That advice must come from a licensed financial adviser, and we are happy to work alongside yours. Our SMSF lending page has more.
