SMSF vs Buying in Your Own Name: Which Is Better for Property?
If you want to invest in property, you can buy in your own name or through your self-managed super fund. Both can work. They suit different people and different goals. Here’s a plain-English comparison.
Side by side
| Your own name | Through your SMSF | |
|---|---|---|
| Deposit | Can be as low as 10%, or less with LMI | Usually 20% to 30% or more |
| Interest rates | Standard investment rates | Usually higher |
| Lender choice | Most lenders | Fewer, mostly specialist lenders |
| Tax on rent | Your marginal tax rate | 15% in the accumulation phase |
| Negative gearing | Losses can reduce your personal tax | Losses stay inside the fund |
| Capital gains tax | 50% discount after 12 months, at your tax rate | One-third discount after 12 months, so 10% effective |
| Access to money | Sell or borrow against equity at any time | Locked in until you can access super |
| Renovations | Can borrow to renovate | Can’t use the loan to improve |
| Who can live there | You can move in later | No related party can live in or rent it |
| Running costs | Normal ownership costs | Plus SMSF admin, audit and trust costs |
When an SMSF can make sense
- Business owners buying their own premises. The business pays market rent into the fund, building your super instead of a landlord’s.
- People with a large super balance and strong contributions who want property in their retirement mix.
- Long-term holders who plan to keep the property into retirement, when income and gains in pension phase may be taxed even less.
When your own name usually makes more sense
- You want to use the equity to buy more property later
- You want negative gearing to reduce your personal tax
- You may want to live in it one day
- You plan to renovate or develop
- Your super balance is modest, so one property would make up most of it
See investment loans for buying in your own name.
A simple example
Dan runs a physio clinic and rents his premises. His SMSF has a healthy balance and he and his partner contribute regularly. His SMSF buys the clinic at market value with an LRBA, and his business pays market rent to the fund. The rent helps repay the loan, and over time the property builds their retirement savings.
His friend Kate earns a high salary and wants to grow a property portfolio. She buys in her own name, uses negative gearing, and later uses the equity to buy a second property. Different goals, different structures.
These are illustrative examples, not real clients.
Get the right advice
Choosing a structure is a financial advice and tax decision. Talk to a licensed financial adviser and your accountant. Once you know which way you’re going, we’ll find the right loan. Back to SMSF loans.
Albert Waldron is a Credit Representative (407514) of Australian Finance Group Ltd, Australian Credit Licence 389087. This is general information only and does not take into account your personal circumstances. Please seek advice before acting. SMSF loans are complex. We arrange the loan only. Get advice from a licensed financial adviser and your accountant about whether an SMSF or property investment suits you. Tax information is general; speak to your accountant.