Is Buying Overseas Property Through SMSF a Wise Decision?

Be aware of the considerations in buying investment property overseas using SMSF

The Self Managed Super Fund (SMSF) sector is growing rapidly in Australia. This is mainly due to the attractive benefits SMSFs offer, such as tax breaks and investment flexibility. In recent years, we have seen a surge in the number of SMSF trustees looking to purchase overseas property through their fund. While this can be a wise decision, it’s essential to understand the risks and requirements before taking the plunge.

Borrowing Rules

If you’re thinking of using your SMSF to buy an investment property overseas, there are a few things you need to be aware of. Firstly, under the current rules, You’ll need to ensure that the property you’re buying is for investment purposes only, so holiday homes or personal use properties are out of the question. The property must also be located in a zoned area for commercial or residential use.

You’ll also need to be aware of the borrowing rules around SMSFs. For example, you can only borrow money through an SMSF if the fund buys a single acquirable asset, and no part of that asset can be used for personal use. The loan must also be secured against the property itself, so you can’t use your home as security.

Understand SMSF compliance rules and restrictions for property investment


As well as meeting the borrowing requirements, you’ll also need to make sure that you meet the SMSF loan requirements. These include having no more than six members in your fund, and all members must be trustees. You’ll also need an Australian Business Number (ABN) and a Self-Managed Super Fund (SMSF) tax file number.


Of course, there are always risks involved when it comes to investing. But with the proper research and advice, these risks can be minimised. When it comes to SMSF and overseas property investment, there are a few key factors you need to be aware of:

  • Exchange rate risk – This is the risk that the value of the Australian dollar will fall underneath the currency of the country where you are buying property. This can have a significant impact on the value of your investment.
  • Market risk – This is the risk that the property market in the country you are investing in will fall, and you will not be able to sell your property for a profit.
  • Legal risk – This is the risk that there may be problems with the legal ownership of the property or that you may not be able to get the necessary approval to develop the property.

If you are thinking of investing in overseas property through your SMSF, it is essential to seek professional advice to be certain that you understand all of the risks involved. There are several ways to minimise these risks, and a professional can help you find the best way to invest in your situation.

SMSF Loans Co can help you with SMSF property investment, from finding the right property to choosing the best loan option to suit your needs.

Contact SMSF Loans CO. Today!

An SMSF member needs to understand additional compliance rules when it comes to purchasing residential or commercial property overseas. If ever you feel lost or overwhelmed with the process, SMSF Loans CO. will help you with the best lending strategy. We would love for you to get in touch with us!

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