SMSF Property Calculator
Calculate whether your SMSF can buy property via a Limited Recourse Borrowing Arrangement. See monthly cash flow, tax savings vs personal ownership, and long-term projection to preservation age. AUD.
A Limited Recourse Borrowing Arrangement allows your SMSF to borrow to buy property. The property is held in a separate bare trust until the loan is fully repaid.
- SMSF trustee establishes a bare trust (also called custodian/holding trust)
- LRBA lender provides loan — legal title held in bare trust, beneficial title held by SMSF
- SMSF makes all repayments from fund assets (contributions + rental income)
- All rental income flows to SMSF and is taxed at 15% (or 0% in pension phase)
- When loan is repaid, legal title transfers directly to SMSF trustees
- Property cannot be substantially improved during the LRBA — only maintained
SMSF property has significant setup costs. The investment must generate sufficient returns to justify these ongoing expenses.
| Cost Item | Year 1 | Ongoing Annual | Notes |
|---|---|---|---|
| SMSF Establishment | A$2,500 | — | One-off setup |
| Bare Trust Legal Fees | A$2,000 | — | One-off for LRBA |
| Annual Audit | A$1,500 | A$1,500 | ATO mandatory |
| Accountant/Admin | A$1,500 | A$1,500 | Tax returns, BAS |
| Investment Strategy Review | A$500 | A$500 | Annual compliance |
| Total | A$8,000 | A$3,500 |
How to Use This SMSF Property Calculator
Enter your SMSF balance, the property price, your planned deposit percentage (minimum 30% for most LRBA lenders), the LRBA interest rate, and expected weekly rent. The calculator shows monthly cash flow within your SMSF and whether your fund balance is sufficient for the deposit.
What Is an LRBA?
A Limited Recourse Borrowing Arrangement (LRBA) is the mechanism by which an SMSF borrows money to purchase a single asset (such as a property). The "limited recourse" refers to the fact that if the SMSF defaults, the lender can only claim the property — not other assets held in the fund. The property is held in a bare trust (also called a holding or custodian trust) until the loan is fully repaid, at which point legal title transfers to the SMSF trustees.
SMSF Property Tax Advantages
Rental income in SMSF (pension phase): 0% tax
Capital gains (held 12+ months, accumulation): 10% effective rate
Capital gains (pension phase): 0% tax
Comparison — personal ownership at 37% marginal rate:
Rental income: 37% (less deductible expenses)
Capital gains (held 12+ months): ~18.5% effective rate
SMSF tax saving vs 37% bracket:
~22% annual income tax saving on rental income
The tax advantages are most powerful at preservation age (60) when the fund transitions to pension phase, making all income and capital gains completely tax-free within the pension account balance limits.
Example: Brisbane SMSF Property Purchase
Helen and James — SMSF Balance $500,000, Property $650,000
| SMSF Balance | $500,000 |
| Property Price | $650,000 |
| Deposit (30%) | $195,000 |
| LRBA Loan Amount | $455,000 |
| LRBA Rate | 7.5% |
| Monthly Repayment (25yr) | $3,363/mo |
| Weekly Rent | $620/week |
| Annual Rental Income | $32,240 |
| Annual Cash Flow (after repayment) | -$8,116 (negative) |
| Tax on Rent (SMSF 15%) | $4,836/yr |
| Tax at 37% personal (comparison) | $11,929/yr |
| Annual Tax Saving | $7,093/yr |
While the property is cash-flow negative within the SMSF, Helen and James continue making super contributions to cover the shortfall. After 25 years at 4.5% growth, the $650,000 property would be worth approximately $1.96M in pension phase — completely tax-free on sale.