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Can You Use Your Super to Buy a House? Here's Everything You Need to Know

Published 6/11/2024 | Last Updated 6/11/2024

Written by:
Joel Simmonds
Head of Advice  

Using your super to buy a house is a topic that sparks a lot of interest, especially for those thinking about homeownership or diversifying their investment portfolio. But can you really buy a house with your super? The answer is yes, but with some important conditions and rules.

In this article, we’ll walk through the options available to Australians wanting to use their super for property, including the First Home Super Saver Scheme (FHSSS) for first-time buyers, and Self-Managed Super Funds (SMSFs) for property investors. Let’s get into it.

Table of Contents

Using Your Super to Buy Your First Home

If you’re a first-time homebuyer, the First Home Super Saver Scheme (FHSSS) could be an option for you. While you can’t directly buy a house with your super, the FHSSS allows you to access a portion of your super to help you save for a house deposit. Here’s how it works:

  • You make extra contributions into your superannuation fund.
  • You can then withdraw those voluntary contributions (along with earnings) when you’re ready to buy your first home.

This can be a good strategy if you’re wondering, “Can I use my super to buy a house?” The FHSSS provides a way to leverage your super to support your home purchase without depleting your retirement savings. However, it’s only available for first-home buyers looking to buy a home to live in — not for investment purposes.

Can I Use My Super to Buy a Home to Live In?

Generally, superannuation is intended for your retirement, so there are strict rules about accessing it for personal use. Outside of the FHSSS, using your regular super fund to buy a house to live in is not permitted.

However, if you are thinking of purchasing property for investment through your super, that’s where a Self-Managed Super Fund (SMSF) comes in. With an SMSF, you can invest in property, but the property can only be used as an investment — it cannot be a residence for you or any related parties.

Buying Investment Property with an SMSF

For those interested in property investment, an SMSF could be the answer to “How can I use my super to buy a house?” By setting up an SMSF, you can use your super to buy an investment property, whether residential or commercial. However, there are some key rules:

  • The property must be solely for investment purposes. You, your family members, or any related parties cannot live in the property.
  • All transactions must meet the “sole purpose test” — meaning that the SMSF property should only benefit your retirement savings.
  • You can also use SMSF loans to purchase a property, allowing you to leverage your super balance.

If you’re thinking about buying property with superannuation, this approach can give you control over property investments within your super.

Common Questions About Using Super for Property

Here are some frequently asked questions to help clarify the process of buying property with super.

Can You Use Superannuation to Buy a House in Australia?

Yes, under certain conditions. With an SMSF, you can use your super to buy an investment property. However, you can’t use your standard super to buy a home to live in, except through the FHSSS for first-home buyers.

How Much Super Can I Use to Buy a House?

The amount of super you can use depends on your SMSF balance and whether you’re applying for an SMSF loan. Keep in mind that using your super should align with long-term retirement goals.

How Do I Use My Super to Buy a House?

To buy a property with your super, you’ll need to establish an SMSF and comply with the strict regulations set by the ATO. Alternatively, if you’re a first-time buyer, consider the FHSSS for your deposit.

Can I Access My Super to Buy a House?

In general, you can’t access your regular super to buy a house unless you’re using the FHSSS or investing through an SMSF.

Can I Buy a House with Superannuation and Live in It?

No, you cannot live in a property bought through an SMSF. It must be an investment property and cannot be used for personal or family use.

Getting Started with Property Investment through Super

For those considering SMSF property investment, it’s important to weigh up the benefits and responsibilities. SMSF property purchases can provide a long-term investment for your retirement, but they require careful management and compliance with regulations.

For more on this, be sure to check out our article on Buying Investment Property with an SMSF: What You Need to Know, where we dive deeper into SMSF property investment, including the restrictions, potential benefits, and what to watch out for.

Conclusion

Buying a property with superannuation can be a complex yet rewarding strategy for those focused on building wealth for the future. Whether you’re a first-time buyer wanting to access your super for a deposit through the FHSSS or an investor considering an SMSF, understanding the options is key to making the right decision. 

If you’re ready to explore the possibilities, get in touch to speak with one of our qualified financial advisers to help you on your journey to secure financial freedom.

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December 5, 2024

This is a publication of Direct Wealth Pty Ltd, a wholly owned subsidiary of Direct Wealth Group Pty Ltd.

General Advice Warning – The information contained in this article is of a general nature and does not take into account your particular objectives, financial situation or needs. You should therefore consider the appropriateness of the advice for your situation before acting on it. You should obtain and consider the relevant Product Disclosure Statement (PDS) and seek the assistance of an authorised financial adviser before making any decisions regarding any products or strategies mentioned in this publication.

Disclaimer – While all care has been taken in the preparation of this blog, to the maximum extent permitted by law, no warranty is given in respect of the information provided and accordingly, neither Direct Wealth nor its related bodies corporate, employees or agents shall be liable for any loss suffered arising from reliance on this information.

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