Can I use my super to buy a house?

Most buyers can't use super to buy a house. But investors can purchase properties through an SMSF, and first home buyers can use voluntary super contributions to form a deposit.

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The short answer is no: in Australia you can't use superannuation to buy a house. But the longer answer is that eligible first home buyers can access up to $30,000 of voluntary super contributions to use as a deposit on a home.

And there are two other ways you can use superannuation to get a property: using a self-managed super fund to a buy a property, or accessing your super before retirement (in very specific circumstances).

The First Home Super Saver scheme explained

In 2017 the federal government announced a new scheme to help first home buyers get a deposit together for a property purchase. The scheme came into law on 1 July 2018 and applies to voluntary super contributions made since July 2017.

First home buyers can access up to $15,000 in super contributions per year up to $30,000 in total per person. A couple buying a house could therefore use up to $60,000 in voluntary superannuation contributions saved over two years. The biggest benefit of the scheme is that you can earn a higher rate of return on money in a super fund (compared to a savings account) while paying lower tax on the funds (just 15%) while lowering your pre-tax income if you salary sacrifice.

Read finder's full guide to the First Home Super Saver scheme

Buying a home through an SMSF

You can buy an investment property through your self-managed super fund (SMSF) but you can’t use your super balance to buy a home you're going to live in.

This is because superannuation is designed to fund your retirement, not to help you fund the essential purchases you make throughout your life. The purchase of an investment property is allowed because it gives you the potential to earn rental income and also take advantage of a capital gain when you sell the property, thereby increasing your retirement savings.

Compare SMSF loans to buy investment properties

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Data indicated here is updated regularly
$
years
Name Product Interest Rate (p.a.) Comp. Rate^ Application Fee Ongoing Fees Max LVR Monthly Payment
Liberty Financial SMSF
5.2%
5.63%
From $495
$30 monthly ($360 p.a.)
75%
$824.62
A self-managed super fund loan from Liberty Financial. Available with a 20% deposit.
Freedom Lend Variable SMSF
5.04%
5.66%
$1,645
$395 p.a.
70%
$809.87
A flexible SMSF home loan with interest-only repayments. 100% offset account attached.
Freedom Lend Variable SMSF
4.89%
5.51%
$1,645
$395 p.a.
65%
$796.15
Interest-only SMSF home loan with flexible repayments. Includes a 100% offset account.
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Accessing your super before you retire

There are strict rules in place to prevent Australians accessing their superannuation balance before they retire. These rules are designed to ensure that Australians have enough money to enjoy a comfortable lifestyle once they stop working.

In order to access your super before your retirement you’ll need to satisfy a condition of release. Some common examples that might allow you to access your super early are if you suffer a serious illness or disability, or if you are experiencing extreme financial hardship (including receiving Commonwealth income support payments).

Using super for a deposit on a house is not a condition of release.

But it’s not all bad news. If you’ve reached the preservation age, which is 55 years for Australians born before July 1960, and at least 56 for people born after June 1960, the rules surrounding early access to your super aren’t quite as strict.

If you fit this category and you want to access your super benefits to put down a deposit on a house, there are two options you can consider to help you get the funds you need:

  • Retire. If you’ve reached your preservation age and you retire, you can withdraw your super benefits. However, you should be aware that you may need to pay tax on any super benefits you withdraw before reaching 60 years of age.
  • Set up a transition to retirement (TTR) pension. This option is designed to allow Australians who have reached their preservation age to keep working while also accessing some of their super benefits – you can withdraw between 4% and 10% of your pension account balance each year.

There is a range of financial and taxation implications to consider if you choose either of these approaches, so ask your accountant for their expert advice.

Want to find out more about super? Check out our super funds guide

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If I can't use my super to get a house deposit what are my options?

If none of the options above work for you here are some other tips you can put into practice. These include:

  • Look for other ways to save a deposit yourself. Check out our complete guide to deposit savings for more information.
  • Guarantor loan. If your parents own their own property and are willing to help out they could guarantee a portion of your deposit. It's not without risks but it's a great option for some buyers.
  • The first home loan deposit scheme. This new scheme involves the government guaranteeing 15% of your deposit, helping you avoid lenders mortgage insurance costs.

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Data indicated here is updated regularly
$
years
Name Product Interest Rate (p.a.) Comp. Rate^ Application Fee Ongoing Fees Max LVR Monthly Payment
Westpac Flexi First Option Home Loan
2.29%
2.72%
$0
$8 monthly ($96 p.a.)
95%
$577.55
Up to $3,000 refinance cashback.
A flexible and competitive variable rate loan. Eligible borrowers refinancing $250,000 or more can get $2,000 cashback per property plus a bonus $1,000 for their first application. Other conditions apply.
St.George Basic Home Loan
2.54%
2.56%
$0
$0 p.a.
80%
$596.91
Up to $4,000 refinance cashback. With this competitive variable rate loan from St.George, refinancers borrowing $250,000+ can get up $4,000 cashback and borrow up to 80% of the property's value. (Terms, conditions & exclusions apply).
HSBC Fixed Rate Home Loan
1.88%
2.98%
$0
$0 p.a.
80%
$546.6
Lock in a competitive fixed rate for 2 years and buy your home with a 20% deposit.
Macquarie Bank Basic Home Loan
2.49%
2.49%
$0
$0 p.a.
60%
$593.01
A competitive variable rate home loan for owner-occupiers. Requires a 40% deposit.
UBank UHomeLoan Variable Rate
2.34%
2.34%
$0
$0 p.a.
80%
$581.39
Enjoy flexible repayments, a redraw facility and the ability to split your loan. Plus, pay no application or ongoing fees.
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Logo for Westpac Flexi First Option Home Loan - Basic Variable Rate (Owner Occupier, P&I)
Westpac Flexi First Option Home Loan - Basic Variable Rate (Owner Occupier, P&I)

Up to $3,000 refinance cashback. A flexible and competitive variable rate loan. Eligible borrowers refinancing $250,000 or more can get $2,000 cashback per property plus a bonus $1,000 for their first application. Other conditions apply.

Logo for St.George Basic Home Loan - LVR 60% to 80% (Owner Occupier, P&I)
St.George Basic Home Loan - LVR 60% to 80% (Owner Occupier, P&I)

Up to $4,000 refinance cashback. With this competitive variable rate loan from St.George, refinancers borrowing $250,000+ can get up $4,000 cashback and borrow up to 90% of the property's value. (Terms, conditions & exclusions apply).

Logo for Athena Liberate Home Loan - 70% to 80% LVR Owner Occupier, P&I
Athena Liberate Home Loan - 70% to 80% LVR Owner Occupier, P&I

A competitive variable rate mortgage for owner occupiers $0 application and $0 ongoing fees. This interest rate falls over time as you pay off the loan.

Logo for Suncorp Back to Basics Home Loan - Better Together Special Offer $150k+ LVR ≤ 80% (Owner Occupier, P&I)
Suncorp Back to Basics Home Loan - Better Together Special Offer $150k+ LVR ≤ 80% (Owner Occupier, P&I)

Get a competitive variable interest rate with no application fee or ongoing fees.

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4 Responses

    Default Gravatar
    AaronApril 11, 2018

    Hi is it possible for me to use my superannuation as a deposit for my daughter to use as deposit for her house

      Default Gravatar
      NikkiApril 11, 2018

      Hi Aaron,

      Thanks for your message and for visiting finder – the leading comparison website & general information service built to give you advice in your buying decision needs. How are you doing today?

      Please note that we’re a product comparison website and we hold no affiliation with any company we feature on our site. We provide general information on products to assist you in your buying decision process hence we cannot recommend product / service that is rightfully fit for you.

      It’s possible to buy property through your self-managed super fund (SMSF)? However, you can’t use your super balance to buy a principal place of residence, only an investment property.

      This is due to the simple fact that superannuation is designed to fund your retirement, not to help you fund the essential purchases you make throughout your life. The purchase of an investment property is allowed because it gives you the potential to earn rental income and also take advantage of a capital gain when you sell the property, thereby increasing your retirement savings.

      It’s also worth pointing out that there are limits on how much you can borrow when taking out an investment property loan through an SMSF, and the tax benefits of investing through super are different to when you invest using your own money. The finder.com.au guide to investing in property through your SMSF explains all the ins and outs.

      In the case of purchasing the house for your daughter, you may consult this with a mortgage broker for technicalities. Otherwise, the property owner would be under you.

      Hope this helps! Feel free to message us anytime should you have further questions.

      Cheers,
      Nikki

    Default Gravatar
    KristinaJanuary 21, 2017

    I am 37 years old with a 14 month old daughter and another one due shortly.
    I was renting but couldn’t save for a house deposit so I have moved back to my parents with my partner to save. I still find it hard to save the money I need for a deposit quick enough and was wanting to see if I can access my super to take out enough for a deposit for a house.
    It’s hard to be all living in a house together with 4 adults and 2 kids.

      Avatarfinder Customer Care
      MayJanuary 23, 2017Staff

      Hi Kristina,

      Thank you for your question and for contacting finder.com.au we are a financial comparison website and general information service we are not mortgage specialists so can only offer general advice.

      I’m afraid that currently, it’s not possible to use your super balance as a deposit to buy a principal place of residence. This is because your superannuation is designed to fund your retirement and not to help you fund the essential purchases you make throughout your life.

      If you’d like to check your options for a home loan, you’d be best to speak to a mortgage broker who will take all your circumstances into account and offer you a range of lending options.

      Regards,
      May

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