There are a number of ways Australians can use their super to buy property.
This guide explains the different ways to buy a home using super, the rules you need to follow, and the advantages and disadvantages of each option.
Can you use super to buy a house?
Yes, you can use money in your super to buy a house if you fit within one of the following three groups:
1. You’re a first-home buyer using the First Home Super Saver (FHSS) scheme.
This Australian Government initiative allows you to make voluntary contributions into your super fund, then withdraw those contributions (along with associated earnings) to help buy your first home, while benefiting from concessional tax treatment.
2. You have a self-managed super fund (SMSF) and plan to purchase an investment property.
This allows you to invest your retirement savings in residential investment property or commercial property, provided the investment is maintained solely to provide retirement benefits for fund members. There are currently 663,867 SMSFs in Australia.
3. You have reached preservation age.
This is the earliest age at which you can generally access your super, provided you also meet a condition of release. In Australia, preservation age ranges from 55 to 60, depending on your date of birth. Once you’ve reached your preservation age and retired (or turned 65), you can use your super for any purpose, including buying a home, renovating a property or paying off an existing mortgage.
How to buy a home through the FHSS scheme
The First Home Super Saver (FHSS) pathway is becoming increasingly popular among first-home buyers. In the 2024–25 financial year, there were 18,300 release requests under the scheme, with 15,200 payments made to individuals, totalling $303.6 million.
The FHSS allows first-home buyers to make voluntary contributions to their superannuation, up to $15,000 per year and up to $50,000 cumulatively across all years.
Using salary sacrifice, you can contribute pre-tax income at a concessional tax rate of 15% towards super savings. This can reduce the tax you pay on your contributions, and help you build your deposit faster. You can also add post-tax non-concessional contributions.
When you withdraw eligible FHSS funds to buy your first home, the amount is taxed at your marginal tax rate, but you receive a 30% tax offset.
To be eligible for the FHSS, you must:
be aged 18 or over
have never owned property in Australia (including investment properties, commercial properties, vacant land, lease of land, and company title interests in land)
list your name on the title of the property you buy
have no completed release request in a FHSS determination made in relation to you
sign a contract to build or purchase a home within 12 months of requesting release of funds
notify the ATO within 28 days of signing a property purchase contract.
How to access your FHSS funds
When you’ve saved enough to put towards a house deposit, you can log into the Australian Taxation Office (ATO) through myGov and apply for your FHSS determination.
The ATO will calculate the maximum withdrawal amount. The releasable amount usually includes:
100% of non-concessional contributions
85% of concessional contributions
the amount of earnings associated with these contributions.
Once you receive your determination, you can request a formal release of funds through the ATO. It will automatically withhold the appropriate amount of tax. This is based on either
your expected marginal tax rate (including Medicare levy), minus a 30% offset
17%, if the ATO can’t estimate your expected marginal rate.
The ATO will also offset the release against any outstanding debts with the ATO or another Commonwealth agency.
Pros & cons of using the FHSS to buy a house
Pros | Cons |
Voluntary concessional contributions are generally taxed at 15% in super, with a 30% tax offset applying when eligible funds are released. | Released FHSS funds count towards your taxable income, which may increase compulsory student loan repayments. |
The $15,000 annual and $50,000 lifetime limits apply per person, meaning eligible couples can effectively double the amount they save. | Accessing your money through the ATO can take 15–25 business days. If you sign a contract prior to requesting release, you may incur penalty tax if funds are not accessible in time. |
The ATO applies a deemed earnings rate to your contributions, which can work in your favour if your super investments underperform. | The contribution limits mean the scheme may only fund part of your required deposit. |
Keeping your savings in super reduces the temptation to spend them before buying. | If you decide not to purchase a home, your FHSS contributions generally remain in your super until you meet a condition of release, like retirement or compassionate grounds. |
Mansour Soltani
Financial Services Expert
“The First Home Super Saver Scheme can be one of the most tax-effective ways to build a deposit, but it works best when it’s planned well in advance. Too many buyers discover the scheme only after they’ve already saved outside super, missing an opportunity to accelerate their deposit through concessional tax treatment. Understanding the rules early can make a meaningful difference to your buying timeline.”
Mansour Soltani, Director, Soren Financial
How much extra could a first-home buyer save using the FHSS?
For someone on a 30% marginal tax rate, contributing the maximum $50,000 through the FHSS Scheme could increase the amount available for a home deposit by around $7,500 compared with saving outside super (before associated earnings and release tax adjustments).
Saving method | Amount available for your deposit |
Save outside super (30% tax) | $35,000 |
Save through the FHSS (15% tax on concessional contributions) | $42,500 |
Additional deposit using FHSS | +$7,500 |
Note: This is a simplified example. Your actual benefit will depend on your marginal tax rate, the type of contributions you make, associated earnings and the tax applied when your FHSS funds are released.
How to buy a home through a SMSF
“Property inside an SMSF isn’t simply about purchasing real estate. It’s about ensuring the investment aligns with your long-term retirement strategy, cash flow requirements and compliance obligations. Before committing, trustees should understand not only what they’re allowed to do, but whether the investment genuinely strengthens their retirement position.”
James Haywood, Director, Approved Finance
Purchasing a home through a self-managed super fund (SMSF) is limited to investment properties, including commercial premises.
However, under new rules announced in 2026, SMSFs will no longer be able to use Limited Recourse Borrowing Arrangements (LRBAs) to borrow money to purchase new residential investment properties.
Existing borrowing arrangements will be grandfathered, and SMSFs can still purchase property using available cash. SMSFs can still borrow money to buy commercial property.
To be eligible to buy property under your SMSF, you must:
meet the sole-purpose test of solely providing retirement benefits to fund members (i.e. the investment is maintained solely to provide retirement benefits to fund members)
not be acquired from a friend, relative, business partner or other related party to a fund member
not be lived in or rented by a fund member or related party.
If the property is a commercial property, the premises may, in some cases, be leased to a fund member, but strict criteria apply.
In order to purchase a property through a SMSF, you will need to set up a bare trust and register a trustee company.
Investment income earned by a complying SMSF is generally taxed at a concessional rate of 15% while the fund is in the accumulation phase. If the property is sold after being held for more than 12 months, the effective capital gains tax rate is reduced to 10%. Once the property is supporting retirement-phase pensions, rental income and capital gains may be tax-free.
Pros & cons of using your SMSF to buy property
Pros | Cons |
Tax benefits apply for rental income, with rent received taxed at a lower rate of just 15%. | SMSFs can no longer borrow money to buy new residential investment properties, meaning you’ll generally need sufficient funds in your SMSF to buy outright or invest in commercial property if borrowing is required. |
If a property is held for more than 12 months, the SMSF may qualify for a one-third CGT discount, reducing the effective tax rate on capital gains from 15% to 10%. | Establishment, accounting, auditing, legal, property management and loan costs (where applicable) can run into the thousands of dollars each year. |
Property can diversify your retirement savings and provide long-term capital growth and rental income. | SMSFs must comply with superannuation laws and ATO requirements, with significant penalties for breaches. |
How to buy a home with your super when you retire
If you’ve reached preservation age and meet a condition of release (e.g. you’re retiring), you can access your super and use the money however you choose, including to pay off your existing mortgage, buy another home or renovate.
To access your super, you generally need to:
have reached your preservation age and permanently retired, or
have turned 65, regardless of whether you’re still working.
You can withdraw your super as a lump sum or, if eligible, receive regular payments through a transition to retirement (TTR) income stream or an account-based pension.
The tax treatment depends on how and when you access your super. If you’re aged 60 or over and withdraw benefits from a taxed super fund, lump sum withdrawals are generally tax-free. If you’re receiving a TTR income stream before fully retiring, different tax rules may apply, including a 15% tax offset in some circumstances if you’re under 60.
Pros & cons of using super to buy a house at retirement
Pros | Cons |
Once super is released after retirement, there are generally no restrictions on the type of property you can buy or who can live in it. | Older Australians may find it more difficult to get a mortgage, as lenders may be concerned about their long-term ability to service the loan. |
Using super may allow you to buy a property outright or contribute a larger deposit to reduce your LVR (and get a better interest rate). | If you buy an investment property outside super, you may pay tax on any rental income and capital gains personally. |
Super can also be used to renovate or pay off an existing property. | Money withdrawn from super to buy property will no longer be available to fund living costs, healthcare or other retirement expenses. |
FAQs on how to access superannuation to buy a house
Is buying my first home using the FHSS better than putting money in a savings account?
In most cases, yes. The First Home Super Saver (FHSS) Scheme can help you build a larger home deposit than a regular savings account because eligible contributions receive concessional tax treatment and attract associated earnings calculated by the ATO. This means more of your money goes towards your deposit rather than tax.
However, the scheme isn’t suitable for everyone. Contributions are capped at $15,000 per financial year and $50,000 in total, and you can only access your money under the FHSS rules. If you want complete flexibility or expect to need your savings before buying a home, a traditional savings account may be the better option.
Can I buy an investment property using FHSS?
No. The FHSS can’t be used to buy an investment property. It’s only available to eligible first-home buyers who intend to live in the property for at least six months within the first 12 months of ownership.
Can my SMSF partner with other investors to buy property?
Yes, your SMSF can partner with other investors to purchase property, typically as tenants in common. Under this arrangement, each party will own a specific percentage of the purchased property. Strict rules apply and must be satisfied by all purchasing parties.
How do I set up an SMSF to buy property?
Make sure your SMSF has an adequate balance (many advisers suggest at least $200,000) so the potential benefits outweigh the ongoing costs of running the fund. Decide whether to appoint individual or corporate trustees, establish a trust deed that permits property investment, prepare a written investment strategy, register your SMSF with the ATO and open an SMSF bank account.
If you’re purchasing commercial property, your SMSF may be able to borrow using a Limited Recourse Borrowing Arrangement (LRBA), subject to lender and regulatory requirements. However, SMSFs can no longer use LRBAs to borrow money to purchase new residential investment properties, so these properties generally need to be purchased using existing SMSF funds.
How much does it cost to set up and run an SMSF?
The cost of setting up and running an SMSF varies depending on the provider and the complexity of the fund. As a guide, setup costs typically range from $1,400 to $1,900, while ongoing administration, accounting, auditing and compliance costs generally range from $1,800 to $4,500 per year.
Additional expenses include property management, insurance, lender fees (where applicable) and investment management costs.
What happens if my SMSF property investment underperforms?
If an SMSF property investment underperforms, the fund still needs to cover loan repayments, council rates and other ongoing costs. This can place pressure on the fund’s cash flow, and other assets may need to be sold if contributions and rental income are not enough to meet expenses.
Trustees must also regularly review the investment to ensure it continues to align with the SMSF’s investment strategy and remains in the best financial interests of members.
Can I use SMSF funds to renovate a property?
Yes, but it depends on whether the property is subject to a borrowing arrangement. If the property is owned outright by the SMSF, fund assets can generally be used to renovate or improve it, provided the investment continues to comply with the SMSF’s investment strategy and the sole purpose test.
If the property is held under a LRBA, the rules are much stricter. SMSF funds can generally be used for repairs and maintenance, but not for improvements that fundamentally change the character of the property while the LRBA is in place.
Are there restrictions on the type of property my SMSF can buy?
Yes. An SMSF can buy both residential investment property and commercial property, but strict rules apply. Residential property cannot be lived in or rented by fund members or their related parties, including as a holiday home, and it generally cannot be purchased from a related party.
Commercial property offers more flexibility. Your SMSF can purchase business real property from a related party or lease it back to your own business, provided the transaction is conducted on arm’s-length terms at market value or market rent.
Should I use my super to pay off my mortgage in retirement?
It depends on your financial circumstances. Using your super to pay off your mortgage in retirement can reduce your living expenses, improve cash flow and provide greater financial security. It may also improve your Age Pension position, as your principal place of residence is generally exempt from the Centrelink assets test.
However, withdrawing a large lump sum from your super will reduce the amount you have invested to generate income throughout retirement. Before paying off your mortgage, consider whether you’ll still have enough super to cover your ongoing living expenses, healthcare costs and other unexpected expenses over the long term.
James Haywood
Financial Services Expert
James specialises in helping property investors accelerate their investment growth by utilizing cutting-edge technology to identify high-growth suburbs and optimize loan structures. Through the Property Surfer Program, clients can save on home loans, set up optimal property purchase structures, access top-tier market data, and benefit from automated loan repricing every three months. The services also focus on asset protection and risk minimization to ensure the best outcomes for clients.
Since 2017, James has been dedicated to enabling property investors to scale their portfolios and make data-driven investment decisions. By engaging with James, clients benefit from not only their expertise but also a network of top referral partners in financial planning, accounting, conveyancing, family law, and building inspections. Together, they aim to achieve greater growth and freedom in the property investment journey.