Buying Property with Super: The Complete LRBA Guide

A Limited Recourse Borrowing Arrangement (LRBA) enables a Self-Managed Super Fund (SMSF) to borrow funds for the acquisition of a single acquirable asset, such as a residential or commercial property.

Key Tax Advantages

• Rental income inside super is capped at 15% income tax during accumulation phase.
• Capital gains on assets held for greater than 12 months are taxed at an effective rate of just 10%.
• In pension/retirement phase, tax on rental profits and capital gains can drop to 0%.

Compliance Requirements

LRBA properties must be held in a specialized Bare Trust (Holding Trust) until the loan is completely repaid. Lenders have no recourse against any other assets within your super fund in the event of a default.