Unlock SMSF Geared Property Strategies.

A geared property strategy lets your SMSF borrow money to buy an investment property, giving you the potential to grow your super faster through both capital growth and rental income.

The borrowing is done via a Limited Recourse Borrowing Arrangement (LRBA), which keeps everything structured and compliant while you retain full control over the investment decision.

Many trustees use this approach to access larger or higher-growth assets they couldn’t buy outright with cash in the fund. 

 Yes - residential property is one of the most common assets acquired under an LRBA.

Your SMSF can borrow to buy a house, unit or apartment as long as it meets the single acquirable asset rule, is held correctly in a bare trust, and aligns with your fund’s investment strategy.

We manage the entire setup and ongoing administration so the process stays straightforward. 

A bare trust is a simple legal structure where an independent trustee holds the legal title to the property on behalf of your SMSF until the loan is repaid.

Your fund remains the beneficial owner the whole time. This structure is required under LRBA rules to protect the rest of your SMSF assets and keep everything fully compliant – we organise it all as part of the transfer or establishment process. 

It means the LRBA can only be used to buy one clearly identifiable asset – for example, a single residential property on one title.

You cannot use the same loan to buy multiple unrelated properties or mix different asset types.

This keeps the arrangement simple and protects your fund. Separate LRBAs can be set up later if you want to add another property.

Most lenders offer between 65% and 80% of the property’s value (loan-to-value ratio), though some go higher with lenders mortgage insurance.

The exact amount depends on your SMSF’s cash flow, existing assets and the lender’s assessment.

We review your fund’s position during the SMSF Health Check and help you understand realistic borrowing capacity before you proceed. 

No – residential property owned by your SMSF must be rented at market rates to unrelated third parties only.

You and any related parties cannot live in it, use it personally or receive any non-arm’s-length benefit.

This is a strict ATO rule to protect the tax concessions of your fund.

Commercial or business real property has more flexibility in certain situations. 

Rental income is taxed at the concessional rate of 15% (or zero once your fund is in pension phase).

Capital gains on sale receive a one-third discount after 12 months and can be completely tax-free in pension phase.

Interest and holding costs are also deductible inside the fund, often creating a more efficient structure than holding the same property personally.

We prepare all the reporting so you simply receive the net benefit. 

The main risks include:

• Concentration (one property making up a large part of your fund),

• Liquidity (property can take time to sell),

• Interest-rate changes affecting cash flow, and

• Higher compliance requirements.

Leverage amplifies both gains and losses, so it’s important to have buffers.

We conduct your SMSF Health Check before any strategy begins, so you can see exactly how it fits your overall fund.

No - borrowed money can only be used to acquire the property and preserve its value (for example, essential repairs).

Major improvements, extensions or developments cannot be funded from the loan and must come from existing SMSF cash or a new arrangement.

We help you plan cash flows so everything stays compliant and straightforward.

There is no legal minimum, but most trustees and lenders look for enough liquidity to cover the deposit, stamp duty, ongoing loan repayments and a buffer for vacancies or rate rises.

We review your current fund balance and cash flow during onboarding and give you clear guidance on what is realistic for your situation.

You’ll need a properly drafted loan agreement, bare trust deed, investment strategy update and arm’s-length evidence.

All cash flows must go through the SMSF bank account and be fully documented.

We prepare and manage every document, coordinate with your lender and ensure the SMSF Health Check confirms everything is up to date before the strategy begins.

Yes - each property can have its own separate LRBA.

You cannot finance multiple properties under a single loan.

This gives you flexibility to build a diversified property portfolio over time while keeping each arrangement clean and compliant.

Once the loan is repaid, the bare trust transfers legal title to your SMSF.

The property then sits directly in the fund like any other asset, with no further borrowing restrictions.

We handle the transfer paperwork and update all records seamlessly. 

If rental income is lower than expenses (including loan interest), the resulting tax loss can be carried forward inside the fund and offset against future income or gains.

This can be very tax-efficient compared with personal negative gearing.

We track everything in your annual financial statements so you always know where you stand. 

Yes, but all terms must be at arm’s length – market interest rate, proper documentation and no favourable treatment.

Many trustees prefer third-party lenders for simplicity. We review the structure with you and ensure everything meets ATO standards. 

You’ll need annual independent valuations (or more frequently if required), detailed records of all income and expenses, and evidence that the property is used solely for investment.

Auditors scrutinise geared properties closely.

We prepare all the documentation, coordinate valuations and make the audit process effortless for you.

It is possible in theory but extremely difficult in practice.

Most lenders will not finance overseas assets under LRBA rules, and foreign title and tax issues add significant complexity.

We generally recommend focusing on Australian property for compliance and ease of administration.

Every investment, including geared property, must be made solely to provide retirement benefits for members.

No personal or pre-retirement benefit is allowed. As long as the property is held and rented at arm’s length, it usually satisfies the test.

Yes - refinancing is allowed and treated as a new arrangement under current rules.

It can be a useful way to access better interest rates or terms.

We manage the documentation and ensure the new loan still complies with all LRBA requirements.

The biggest ones are:

• mixing personal and SMSF funds,

• using borrowed money for improvements,

• failing to keep proper records,

• not updating the investment strategy, and

• underestimating holding costs or vacancy periods.

Many trustees also overlook the extra compliance burden. We build safeguards into every step so these issues simply don’t arise once your fund is with Ez SMSF.