Can My SMSF Buy Property? The Rules in Victoria for 2025

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Can an SMSF Buy Property in Victoria?

Yes—self-managed superannuation funds (SMSFs) can buy both residential and commercial property, provided the purchase meets the strict rules of the Superannuation Industry (Supervision) Act 1993 (Cth) (SIS Act) and complies with ATO trustee obligations.

But this is not the same as buying in your own name. The structure, paperwork, and timing must be exact—or the transaction may:

  • Trigger compliance breaches

  • Be rejected by the lender

  • Invalidate your tax concessions

  • Lead to double duty

What Type of Property Can an SMSF Buy?

✅ Commercial Property

SMSFs may purchase commercial real estate—including offices, warehouses, and retail property. These can be:

  • Leased to unrelated tenants

  • Or leased to your own business at market rates (if done correctly)

This is a common and lawful strategy for small business owners.

🚫 Residential Property for Members

An SMSF cannot:

  • Buy a residential property from a member or related party

  • Allow a member or relative to live in the property—even temporarily

  • Use the property for any private or personal purpose

This rule applies before and after settlement, and breaching it can result in severe penalties.

Can an SMSF Borrow to Buy Property?

Yes, but only under a Limited Recourse Borrowing Arrangement (LRBA) that meets the strict requirements of:

  • Section 67A of the SIS Act, and

  • The ATO’s borrowing rules

The borrowing must:

  • Be used to acquire a single acquirable asset

  • Be structured so that the lender’s rights are limited to the asset only

  • Involve a custodian trustee (bare trust) holding the legal title

  • Be properly documented before contracts are signed

When Can an SMSF Be Named on the Contract?

Only after the bare trust (custodian trustee) is properly established.

If you sign a contract in the SMSF’s name before the bare trust is created:

  • You may trigger double stamp duty

  • The ATO may disqualify the LRBA

  • The bank may refuse to lend

At Victorian Property Settlements, we ensure:

  • The custodian trust is established before exchange

  • The correct entity is named on the contract

  • The LRBA is compliant with both lender and ATO requirements

What About Stamp Duty?

Stamp duty is payable only once if the SMSF trustee is properly structured and declared.

To avoid double duty, the contract must:

  • Be signed by the correct entity (trustee or bare trustee)

  • Be accompanied by the right duties form declarations

  • Not be altered post-signing without professional advice

This is especially important for:

  • Related party transactions

  • Contract variations

  • Nominations or substitutions after signing

What Happens If the Rules Are Breached?

If your SMSF breaches the SIS Act:

  • The ATO may issue penalties of up to $18,780 per trustee per breach

  • The SMSF may be declared non-complying

  • The fund may lose its concessional tax treatment

  • You may be personally liable for rectification, tax shortfalls, or interest

David Dawn’s Advice to SMSF Trustees

“SMSF property is not DIY. You need the right structure, the right trust, and the right name on the contract—before you sign. If you get it wrong, it’s not just inconvenient—it can be illegal.”

At Victorian Property Settlements, we:

  • Work with your accountant or SMSF adviser

  • Prepare all required declarations and bare trust documentation

  • Review contracts for SIS Act and Duties Act compliance

  • Liaise with banks to ensure LRBA readiness

We are not an SMSF auditor or accountant, but we ensure your conveyancing is compliant from the first step.

Final Thoughts

Buying property through your SMSF can be an excellent strategy—but only if it’s done properly. One wrong signature or missed structure can derail the whole investment and trigger audit, penalties, or tax problems.

Seek professional guidance early, and make sure your contract reflects your trust’s structure, not just your intentions.

Need SMSF-Compliant Conveyancing?

Victorian Property Settlements – Trusted by SMSF trustees across Victoria for over 25 years.
📍 Frankston | 📞 03 9783 0111 | ✉️ david@quick32.com
🌐 www.victorianpropertysettlements.com.au