How to use your super to buy property in 2025
A proposal that would allow first-home buyers early access to their superannuation to help buy property has been welcomed by industry bodies.
The plan – which would enable eligible buyers to withdraw up to $50,000 of their super to put towards a mortgage deposit – is seen as a meaningful step towards addressing homeownership barriers for young Australians.
Housing Industry Association managing director Jocelyn Martin said saving for a deposit was, for many, the “greatest hurdle” to owning a property.
“Superannuation is designed to help people plan for their future retirement, there is no better security in your future than owning your own house.”
How buyers can use their super now
While such a policy would unlock new opportunities for first-home buyers, existing legislation already allows buyers to use their superannuation to purchase property.
Self-managed super fund (SMSF)
You can use your SMSF to buy an investment property. As your fund’s investments are for the sole purpose of providing retirement benefits, you cannot live in it until you have retired.
The Australian Taxation Office states that your SMSF must satisfy the sole purpose test to comply with superannuation laws and be eligible for the associated tax concessions. Failure to meet this test could result in severe penalties, including loss of tax concessions, administrative fines, trustee disqualification, or the fund being declared non-compliant and potentially wound up.
SMSF property rules, the property must:
solely provide retirement benefits to fund members
not be purchased from a fund member’s relative
not be lived in by a fund member or any relative
not be rented by a fund member or any relative
If, however, your SMSF purchases a commercial property, it can be leased to a fund member for business purposes – subject to specific rules. Essentially, it should be managed on a strictly commercial basis with all acquisitions and leases kept at market value; in other words, no ‘mates rates’.
First Home Super Saver Scheme (FHSS)
The FHSS allows eligible first-home buyers to save for a deposit within their superannuation fund. Through this scheme, you make voluntary contributions that can later be withdrawn to use as a deposit.
Contributions can be made using your pre-tax income through voluntary salary sacrifice or personal tax-deductible contributions. These contributions are taxed at concessional rates, which are often lower than most individuals' marginal tax rates.
Voluntary salary sacrifice
Salary sacrifice (for the purpose of saving through your super) is when you and your employer agree for you to receive less pre-tax income and, in return, they direct the outstanding portion into your superannuation account.
Personal tax-deductible contributions
These are funds that you contribute directly to your super. They are in addition to any compulsory super contributions your employer makes on your behalf and any voluntary salary sacrifice.
FHSS property rules
The property must be a residential premises (including vacant land for building)
You must purchase within a specified time frame (or recontribute the funds to super or pay additional tax
How buyers can use their super at retirement age
Once you have reached preservation age (typically 60 years old) and retired – or turned 65 if you are still working – you can access your superannuation for any reason. This includes taking all or some of the funds to purchase a property or pay off your mortgage.
If you’re looking to use your super to buy property, Eventus Financial can help. To find out how – and see why we are an award-winning mortgage broker in Sydney with hundreds of 5-star Google reviews – schedule a no-obligation consultation with Alex.