There are three ways to buy property using super in Australia, with options for first home buyers, investors & retirees
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Our dedicated Home Loan team is here to help. Updated 2 Jul 2026.
Note, this is a guide containing general information only. Please seek personalised professional advice from a qualified advisor before making significant financial decisions.
Yes, it’s possible to tap into your superannuation to buy a property – although there are strict eligibility criteria and conditions attached. Here are the three ways you can use your super to buy a house in Australia:
If you’re an eligible first-home buyer, you can withdraw some of your voluntary super contributions through the government's First Home Super Saver (FHSS) scheme.
From 10 August 2026, you’ll no longer be able to borrow money to buy a residential investment property through your self-managed super fund (SMSF), following the Government's ban on Limited Recourse Borrowing Arrangements (LRBAs) for residential property — the primary structure used for SMSF loans. From that date, SMSFs will only be able to purchase residential investment properties outright using the money already held in their fund.
If you’ve reached the minimum age where you’re allowed to start accessing your super and have retired, you can take out some or all of your super to buy a property or pay off your current mortgage.
If you’re a first home buyer, you can withdraw up to $50,000 of voluntary super contributions (along with associated earnings) through the First Home Super Saver (FHSS) scheme. You can use that money to purchase a new or existing home, but not for an investment property or vacant land (unless you have a contract to build).
Voluntary contributions are taxed at a concessional rate of 15%, instead of the marginal income tax rate (which can be as high as 45%). You can apply to have up to $15,000 of your personal super contributions from any one financial year released, and $50,000 in total, according to the Australian Taxation Office (ATO).
You can enter into a salary packaging agreement with your employer to pay part of your salary into your super account before tax. That’s on top of the compulsory super guarantee payments your employer must make to your super fund. A salary sacrifice arrangement reduces your taxable income, so you may pay less tax on your income, according to the ATO. However, this also means you'll have less take-home pay.
You can make personal after-tax contributions (from your take-home pay). You’ll be able to claim income tax deductions on your tax return.
Here’s an example of how much a first home buyer could save using the FHSS scheme provided by Mark Chapman, Director of Tax Communication at H&R Block.
“Say you’re earning $80,000 a year. You want to put $10,000 of that salary (pre-tax) towards your home deposit using the FHSS scheme. If you pay tax on that as normal and then put it in a normal bank savings account, you will pay around $3,000 of the $10,000 in tax (at 2024-25 tax rates).
“Now, if you put that $10,000 in a FHSS account instead, you will be taxed at just 15%. This means you will only pay around $1,500 in tax. That’s a substantial amount of extra money ($1,500) towards your first home instead of towards your tax bill.
“When you withdraw your money, you will get taxed at your marginal tax rate of 30% minus an offset of 30%. In effect, there’ll be nothing further to pay when you withdraw your money. In addition, the FHSS account earns interest while you have your money in it which, again, is generally paid at a higher rate than most regular bank accounts.”
Eligibility criteria for the FHSS scheme include:
Here are the steps to follow when purchasing property through the FHSS and applying for a home loan:
The funds you access through the FHSS will count towards your taxable income for the year you request the release, according to Mark. You’ll receive a payment summary at the end of the financial year that will show your assessable FHSS released amount, including:
The ATO will withhold tax based on either:
When you lodge your tax return, the ATO will determine your actual marginal tax rate for the year you requested the release and adjust your tax liability accordingly. They will consider the tax already withheld from your assessable FHSS released amount, along with the 30% tax offset.
If you have a SMSF, you can use it to buy an investment property, but not a main residence. Following the Government's ban on SMSFs borrowing to buy residential property, you'll generally need to buy the property outright using the money already in your super fund. SMSFs can still borrow to buy commercial property, provided the loan meets the relevant lending rules.
A SMSF is a private superannuation fund that you manage yourself. It works like a trust and can have between one and six members, according to the ATO. Each member of the fund must be a trustee and can make decisions about how the superannuation is invested (including buying property). Around 1.22 million Australians are members of an SMSF, according to the ATO.
Known as the ‘sole purpose test’, this rule ensures that all investments made by a SMSF are strictly for the benefit of members upon retirement, not for personal use or immediate financial gain.
This rule is designed to prevent conflicts of interest and ensure all transactions are conducted at arm’s length, maintaining the integrity of the fund and compliance with superannuation laws.
Any member(s) of the fund or their related parties can not reside in the property, including as a holiday home.
Otherwise it would breach the ‘sole purpose test’ by providing a present-day benefit rather than preserving the asset solely for retirement purposes.
Keep in mind you cannot put an existing residential investment property you have into your SMSF. However, you can buy a commercial property through your SMSF and rent it out to your business (or that of any fund members).
From mid-2026, you may not be able to take out a mortgage to buy a residential investment property through your SMSF, following the Government's ban on SMSFs borrowing. If you want to purchase property through your SMSF, you'll need to buy it outright using the funds already held in your super.
Before the changes, SMSF property loans were typically structured using a Limited Recourse Borrowing Arrangement (LRBA). Under an LRBA, the investment property is held in a separate ‘bare trust’, which holds the property's legal title, while the SMSF retains the beneficial ownership and receives any rental income generated by the property.
The ‘limited recourse’ aspect means that if the loan defaults, the lender can only recover the property held in the bare trust, rather than accessing the SMSF's other assets, according to Mark Chapman. Existing LRBA arrangements won’t be affected by the changes.
Commercial property is exempt from the ban, meaning SMSFs can still borrow to purchase eligible commercial property using an SMSF loan.
The ban on SMSFs borrowing is set to be legislated after a last-minute deal between Labor and the Greens. It will take effect 45 days after the legislation becomes law.
Katey Russo, Money.com.au Mortgage Broker
“It’s worth noting that SMSF loans can have a higher interest rate and more fees than regular investment property loans (including professional fees for financial or tax planning). Loan repayments will be made through your SMSF, using the rental income generated from your investment property and superannuation contributions made into the fund.”
Katey Russo, Money.com.au Mortgage Broker
Mark Chapman, Director of Tax Communication at H&R Block
“There can be substantial fees and charges associated with the purchase, ownership and subsequent sale of a property in an SMSF. These will eat into your super balance so you need to ensure the income into the super fund will cover these costs and allow for growth. Many people assume that if they contribute personal monies into the purchase, that once the super fund has the money, they can repay themselves. This is not the case. You may contribute your own money to help purchase the property, but that will be counted as contributions and can’t be withdrawn until you meet preservation age and a condition of release (for example, retirement).”
Mark Chapman, Director of Tax Communication at H&R Block
According to Katey, the application process for an SMSF loan is more rigorous than for a traditional mortgage due to additional compliance checks. Typically, you'll require assistance from a mortgage broker or financial expert to navigate the process.
To apply for an SMSF loan, you’ll generally need to provide the following documentation:
Note, that not all lenders offer SMSF non-recourse home loans, so it’s best to speak to a mortgage broker about your options. For example, major banks like Westpac and Commonwealth Bank no longer offer those products.
Interest paid on your SMSF loan may be tax-deductible to the fund, according to the ATO.
Additionally, the rental income generated from your SMSF property will generally be taxed at a concessional rate of 15%, according to the ATO. If you hold the asset for more than 12 months, the fund may also get a capital gains tax discount of one-third – equivalent to 33.33% (when you sell).
Once fund members start receiving a pension at retirement, any rental income or capital gains arising from the SMSF will be tax free, according to Mark Chapman.
If the investment property within your SMSF is negatively geared (where property expenses exceed income), a taxable loss can be carried forward each year to offset future taxable income within the fund. Although, keep in mind that capital losses on your SMSF property don’t offset your personal taxable income outside the fund.
Once you reach preservation age (between 55 and 60, depending on your birth date) and retire, or after you turn 65 if you’re still working, you can withdraw some or all of your super and use it however you want. This includes to buy a house or to pay off your current mortgage.
However, keep in mind that taking out your super as a lump sum may reduce your retirement income (as opposed to using your super as an income stream).
Mark Chapman, Director of Tax Communication at H&R Block
“It may make sense to use your super to pay off an outstanding debt such as a mortgage (once you can actually access it). This will mean you have less money available to live on in pension payments, but on the other hand you won’t have to pay the mortgage every month and you’ll save on the mortgage interest, which depending on the outstanding balance could amount to hundreds or even thousands of dollars saved each month.”
Mark Chapman, Director of Tax Communication at H&R Block
You can use your superannuation money to buy a property outright (if you have the funds available) or as a deposit for a home loan. However, you may not always be able to get a mortgage if you’re over 60, as lenders willing to approve long-term loans for seniors are limited, according to Katey.
“It really depends on the lender. For example, ANZ will consider borrowers over 65. If you've got substantial savings, a stable retirement income or assets you can sell to help repay the loan, then lenders may be favourable to your application.”
— Katey Russo, a Money.com.au Mortgage Broker
If you're over 60, super lump sum payments are usually tax-free. If you’re under 60, you won’t pay tax if you withdraw up to the 'low rate cap', currently $260,000 for the 2025-26 financial year, according to the ATO.
Any amounts over the low rate threshold will be taxed at 15% (including the Medicare levy) or your marginal tax rate, whichever is lower.
Once you take out your super as a lump sum, it’s no longer considered to be super. This means that if you choose to invest the funds, you may need to declare it on your tax return. For instance, you might need to pay capital gains tax when buying and selling property (unless it’s your main residence) or pay tax on interest earned from term deposits or high-interest savings accounts.
It depends. You can’t live in a property owned by an SMSF (it can only be used for providing retirement benefits), that is until you retire. Once you retire, you could transfer the property to you and/or other fund members. This is also known as an ‘in-specie transfer’ meaning your SMSF transfers its assets to you personally.
On the other hand, you can buy a property to live in using your super after retirement with no strings attached.
You’d need enough money for a deposit (usually 20-30% of the property’s value) and a 10% liquidity buffer (of the property’s value) left over after the purchase and all buying costs are deducted. So, for a $600,000 property, you’d need at least $180,000 in your superannuation fund (which includes a 20% deposit and 10% leftover liquidity).
You may be able to get early access to some of your super to cover the cost of your mortgage repayments if you’re experiencing severe financial hardship, according to the ATO.
You’ll need to apply for a financial hardship withdrawal application directly with your super provider which will decide if early access is possible based on your circumstances. The ATO does not make decisions on these cases.
Under the First Home Super Saver (FHSS) scheme, you can withdraw up to $50,000 of your eligible voluntary super contributions – plus associated earnings – to help buy your first home. These contributions can include either:
When you withdraw under the FHSS scheme, you can access:
Megan Birot is a Finance Writer and Head of PR at Money with over a decade of industry experience. She keeps her finger on the pulse of financial trends, providing journalists and media with data, insights, and news that help Australians navigate complex topics and concepts. She's certified in Finance & Mortgage Broking and is compliant to provide general advice in Tier 1 General Insurance.
Sean Callery is the Editor of Money.com.au. He has over 15 years of international experience. He is qualified with a Certificate IV in Finance and Mortgage Broking (FNS40821) and is compliant to provide general advice in Tier 1 General Insurance (RG 146) products.
