You’ve been watching the market. Maybe you’ve run the numbers on how long it’ll take to save a deposit. Maybe you’re thinking ahead to retirement and wondering whether your superannuation could do more than just sit and grow.
If you’ve ever thought, “Can I use my super to buy a house?” or “How can I buy a house with my super?”, you’re not alone. These are common questions, especially as property prices rise and saving outside super gets tougher.
The good news? You can, but only in a few very specific, legally approved ways.
This guide from Ausfirst Lending Group is built around real goals Australians often bring to us, like wanting to buy a first home, invest in property through an SMSF, borrow within your superannuation, or use it to buy a home in retirement. Wherever you are on your property journey, we’ll break down what’s possible, what’s not, and how super might fit into your plan.
Goal 1: Buy Your First Home Using Super
If you’re currently renting or living at home, and you’re finding it hard to build a big enough deposit, the FHSS scheme could offer a smarter way to save. Rather than relying on a regular savings account with low interest and high temptation, FHSS lets you make voluntary contributions to super, then pull them out later to buy your first home.
Here’s how it works:
- You contribute extra into super, either through salary sacrifice (pre-tax) or personal after-tax contributions.
- When you’re ready to buy, you apply to the ATO to release those voluntary contributions, plus any earnings, to use as part of your deposit.
Why this strategy works:
Super is taxed more lightly than most of your income. That means more of your money actually gets saved. For example:
- Salary-sacrificed contributions are taxed at just 15%, which could be much lower than your marginal rate.
- When you withdraw, you get a tax offset, making it more favourable than saving outside super.
You can contribute up to $15,000 per year (voluntarily), capped at $50,000 total per person. If you’re a couple, you could pull out up to $100,000 together, which could significantly boost your deposit power. It’s one of the few ways to use super to buy a house specifically designed for first-home buyers looking for tax-efficient savings.
Who it suits best:
- First-time buyers ready to plan ahead
- Those with stable income who can salary sacrifice
- Anyone wanting to save smarter, not just harder
Just note: your employer’s 11.5% Super Guarantee doesn’t count. Only voluntary contributions apply. And you’ll need a formal ATO release before you sign a contract.
Goal 2: Invest in Property with SMSF
Self-Managed Super Funds (SMSFs) offer more control over how your super is invested, including the option to buy property. But before you jump in, understand this clearly: you can’t use SMSF to buy your own home.
The property must be for investment only. That means:
- You can’t live in it, even temporarily.
- You can’t rent it to family or friends.
- The property must be bought on commercial terms, at arm’s length.
In other words, SMSFs are for serious investors with a long-term lens, not for skipping deposit hurdles or side-stepping lending rules.
What you need to make it work:
- A fully established and compliant SMSF
- A clear investment strategy that includes property
- Ongoing compliance with ASIC and ATO regulations
- Legal, financial, and accounting guidance
You can set up an SMSF with up to six members, which is common for couples or family units. But be warned, managing an SMSF comes with serious responsibilities. There are also serious penalties if you get it wrong.
Goal 3: Borrow via SMSF (LRBA)
Wondering if you can borrow money from your super to buy a house? While you can’t take out a personal loan from your super, if you have an SMSF, the fund may be able to borrow under a Limited Recourse Borrowing Arrangement (LRBA). It’s a structure where only the asset (the property) is at risk if the loan defaults, not your whole fund.
In simple terms:
- The SMSF is the borrower, not you.
- The lender can only recover the specific property linked to the loan, and not your entire SMSF balance.
- These loans are more complex and come with higher scrutiny.
LRBAs aren’t for the faint-hearted. They require careful planning, professional advice, and full compliance from start to finish. But they do open the door to property investment via super, especially for funds with enough equity and stable cash flow.
Watch out for:
- Higher interest rates than standard loans
- More paperwork and ongoing audits
- Stricter borrowing conditions
Want to explore this path? Speak with a mortgage broker who understands SMSF lending. Not every lender offers it, and getting the structure right is critical.
Goal 4: Use Super After Retirement
Once you hit preservation age (between 55 and 60, depending on your birth year), and meet a condition of release (like retirement), you can access your super directly. That includes taking out a lump sum to buy a home to live in.
There’s no need for a scheme or SMSF in this case. You can simply withdraw and purchase, just like you would with any other savings.
This is a common strategy for:
- Downsizers looking to reduce expenses
- Retirees planning a debt-free move
- Anyone wanting to convert super into housing security
But consider this:
Pulling a large chunk from your super reduces the balance that will generate income during retirement. You’ll want to weigh this up carefully, ideally with financial advice.
What’s the Catch? Costs, Risks, and Common Mistakes
Choosing to use super to buy property isn’t free money or a cheat code. There are real risks and costs involved, particularly with SMSFs.
Common costs include:
- Setup and administration fees (especially for SMSFs)
- Professional fees (accounting, legal, advice)
- Higher loan interest rates
- Stamp duty, insurance, and property management
Risks to keep in mind:
- Cash flow stress during vacancies or missed rent payments
- Concentration risk refers to putting too much of your super into one property
- No personal tax benefits (like negative gearing) on SMSF property
- Strict regulations apply; non-compliance can trigger audits or fines
If you’re not careful, the wrong property deal inside the super could cost you more than it gains, especially if you’re being sold a scheme by someone pushing property off-the-plan deals to SMSF newbies.
How to Decide If Using Super for Property Is Right for You
This strategy might be worth exploring if:
✅ You’re a first-home buyer and want a smarter way to save
✅ You’ve built a strong super balance and are ready to invest
✅ You’re retired and want to convert super into a home
It might not be a great fit if:
🚫 You’re early in your career with limited super savings
🚫 You want to use super to get around the lender’s criteria
🚫 You don’t have solid financial advice backing your decision
Before You Make a Move…
Using your super to buy property isn’t something you rush into. If anything, the more tempting it sounds, the more careful you need to be.
Here’s where to start:
✅ Talk to a licensed financial adviser; super rules are complex
✅ Speak with a mortgage broker to assess other pathways
✅ Use tools like MoneySmart and the ATO FHSS calculator
✅ Be cautious of SMSF promoters pushing one-size-fits-all deals
✅ Make sure your decisions are tailored to your long-term goals
Super Can Support Property Goals, but Only When the Fit Is Right
Your super is more than a retirement fund. It’s a long-term financial tool that, in the right circumstances, can help you achieve bigger goals such as buying a home or building wealth through property.
But it’s not a magic key. And it’s definitely not one-size-fits-all.
The good news? With the right guidance, the FHSS scheme, SMSF property strategies, or a post-retirement drawdown can help you move forward, without putting your financial future at risk.
Need clarity on which path makes sense for you? Reach out. Whether you’re just starting to plan or already comparing options, it’s worth getting the right advice before making your next big move.
Frequently Asked Questions (FAQs)
Yes, but only in specific scenarios. You may be able to buy a house with your super if you’re:
- Eligible under the FHSS scheme, or
- Retired and have met a condition of release, such as reaching preservation age
In other situations, super can’t be used to buy a home you intend to live in, especially not through an SMSF. That’s strictly for investment property.
You won’t be able to use the FHSS scheme, as it’s only for first-home buyers. But if you have a Self-Managed Super Fund (SMSF), you may be able to use it to invest in property (not live in it). Alternatively, if you’ve retired and have met release conditions, you can withdraw and use your super however you choose. That includes buying a home.
Yes, but only as an investment. The property needs to pass the sole purpose test, which means it must genuinely support your retirement outcomes. You can’t live in it, use it as a holiday home, or rent it to family or friends.
Not directly. You can’t borrow from your personal super. However, if your super is held in an SMSF, the fund itself might be able to borrow through an LRBA. These loans have strict rules and must be set up correctly to stay compliant.
As of 1 July 2022, you can access up to:
- $15,000 of voluntary contributions per financial year, and
- A maximum of $50,000 in total (per person)
Earnings on those contributions may also be included in your withdrawal. Couples can combine their individual FHSS amounts, giving you up to $100,000 toward a shared deposit.
No. Only voluntary contributions count toward the FHSS. That includes salary-sacrificed (pre-tax) and after-tax personal contributions. However, it does not include your employer’s regular 11% payments.
Your preservation age is when you can first access your super, depending on your birth year (usually between 55 and 60). But you must also meet a condition of release, like retiring or reaching age 65, to withdraw funds. This is important if you’re planning to use a super to buy a home later in life.
Not necessarily. It can be powerful if you:
- Qualify for the FHSS and want tax-effective savings
- Have a strong SMSF with a clear investment plan
- Are retiring and want to buy a home debt-free
But for others, the costs, risks, and complexity might outweigh the benefits. That’s why personalised advice matters.
