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Glossary

Self-managed super fund (SMSF)

Also called: SMSF

A self-managed super fund is a private superannuation fund run by its members, who act as trustees or directors of the corporate trustee. SMSFs are regulated by the ATO and must comply with superannuation law.

An example

Two business partners set up an SMSF and consider whether it could buy the commercial premises their business operates from, using fund savings and a loan.

Why it matters

An SMSF can borrow to buy property only through strict arrangements, and the trustees carry legal responsibilities. Getting licensed financial advice before an SMSF borrows is important.

Points to check

SMSF trustees are responsible for complying with superannuation law, including rules on investment strategy, borrowing and related-party transactions. Before buying property through an SMSF, check that the fund's trust deed allows it and that the investment fits the fund's strategy. Borrowing must use a limited recourse borrowing arrangement. Get specialist advice from a licensed adviser or SMSF specialist accountant, and read the ATO's guidance for trustees before committing the fund to a purchase or a loan.

Read about smsf property lending

Related terms

Further reading: Australian Taxation Office