buying property

A property in a good location can be a wise investment. You may already have options, but if you want to get some extra money to widen your pool of choices, it may be better to find other avenues or funds before you finally place in the deposit.

Amidst retirement, money from your superannuation or super is accessible. You can go as early as accessing it when you’re 55 years old, making it a significant source of money. But is it legal for you to use those funds for buying a property?

Here’s what you should understand about using super to get land:

Superannuation and Property-Buying

Super is money set aside during your time in the Australian workforce, which you may have noticed in a section of the salary breakdown. This compensation is usually paid by an employer, saved up for an employee’s retirement use.

Citizens are allowed to use their super to purchase and invest in land. However, it can depend on what type of super fund you have. Industry super funds or public offer funds like the AustralianSuper are often regulated and, as a result, have more limitations on its investment menu. 

The type of accounts and pieces of lands that can be purchased is significantly reduced, which can be a bother for those who are eyeing a specific piece of land already. If you still want to use your super for buying the land, you may want to look into getting a Self-Managed Superannuation Fund. 

Self-Managed Superannuation Fund

The SMSF is, as the name suggests, a personal super fund. This account is something you manage by yourself as opposed to having industry and retail bodies handle it. There are several advantages and disadvantages of having an SMSF.

For one, you get to choose your investment and insurance, meaning there should be fewer limits to buying property compared to having an industry superfund. An SMSF can also have up to four members, though most opt to just have two for a couple.

However, this means there are added responsibilities. Anyone handling SMSF will hold all the responsibility and will need intensive financial knowledge, requiring more time and effort. It may also require a higher cost on your current super balance as you need to pay for investing, accounting, tax advice and the like. 

Potential Net Returns

Getting an SMSF for buying a property can be appealing, but potential net returns are likely to be up in the air, along with other restrictions. An SMSF isn’t allowed to develop vacant properties. They may also have a hard time borrowing from banks and lenders if their history and reputation show any probability of not paying back loans.

The very reason you’re getting land is in order to invest, but what happens then if there’s no return of investment? How should the land bring you income? Do you hope the land increases in more value to make your money back? There’s also the expenses for the land itself, making it extremely difficult to sustain. 


To sum it up, it is possible to use super to buy properties. However, it’s recommended to get financial advice to find out whether your SMSF and balance would be viable to enter such a transaction. 

Need to set up a self-managed super fund in Sydney? Get in touch with us today! Wealthy You is a mortgage company that provides mortgage solutions and financial services.