Single Contract SMSF Property
House and Land in an SMSF
Can Your SMSF Still Build a House and Land Package?
Buying land and building on it inside an SMSF used to depend on a workaround for funds using an LRBA. New residential LRBAs are gone, so here’s what that workaround was solving, and what still works today.
What “Single Contract” Was Actually Solving
Under an LRBA, an SMSF generally can’t hold land and then separately improve it using borrowed money — that would breach the rule limiting a geared purchase to a single acquirable asset. A standard house-and-land purchase, with one contract for the land and a second for construction, ran straight into that problem if the fund was borrowing.
A “single contract” structure worked around that: a third party settled the land, ran the build contract, and then sold the SMSF the finished property under one contract — legally one transaction, even though land and construction happened in stages behind the scenes. It let a geared SMSF access new-build house-and-land packages that would otherwise have been off-limits.
What’s changed since this page was first written
New residential LRBAs stopped being available from 10 August 2026. Since this structure only ever existed to make a geared house-and-land purchase compliant, it no longer applies to a new purchase — there’s nothing to work around if the fund isn’t borrowing in the first place. An LRBA already in place, or a contract already exchanged before the ban took effect, is generally grandfathered.
Can Your SMSF Still Buy Land and Build?
Yes — with cash. The single-acquirable-asset restriction that made the single-contract structure necessary only applies to borrowed money. A fund using its own capital can buy vacant land and fund construction directly, in stages, without needing any special structure to avoid a two-part-contract breach. It’s a fundamentally simpler transaction than it used to be for a geared fund — just a different set of things to plan for.
What Changes Without Borrowing
- Vacant land produces no rental income. The fund needs to cover land tax, council rates and other holding costs from other assets or contributions until the build is complete and the property is tenanted.
- Progress payments come from the fund’s own cash. Staged builder payments need to be planned for and funded as they fall due, rather than drawn against a loan facility.
- Related-party builders need strict arm’s-length terms. If a member or associate is involved in the build in any capacity, the arrangement needs to be on demonstrably commercial terms and properly documented.
- The trust deed and investment strategy still need to permit it. A non-income-producing asset during construction should be reflected in the fund’s cash-flow and liquidity planning, not just its long-term strategy.
A Turnkey House-and-Land Package Can Still Make Sense
Even without the compliance driver, buying a package where a builder or developer bundles land and construction into a single, fixed-price agreement can still suit a cash-funding SMSF — one settlement process, one price, and less direct administration than managing a separate land purchase and build contract. It’s no longer a structure the fund needs for compliance reasons; it’s simply a practical way to buy, the same as it would be for any cash buyer.
Not Enough Capital for a Full Cash Purchase?
A 13.22C unit trust is the other main option: it combines capital held outside super with SMSF capital in the same property, without the trust itself borrowing, so it isn’t a way to gear indirectly. The ownership split doesn’t have to be fixed either — a fund can start with a small stake (say 20% units to 80% held outside super) and buy further units over time, at independently valued prices, as it builds capital. In practice it tends to suit an established or near-complete property more than one still under construction, given the ongoing valuation and compliance work involved in a trust holding a part-built asset. We cover the mechanics in our guide to residential SMSF property after the 2026 LRBA changes, and the full set of options on our SMSF and Investment Property overview.
The properT network Approach
We start with your fund’s strategy, not a listing. Ask your accountant or financial adviser to confirm your SMSF’s investment strategy, cash-flow position and risk profile, share it with us, and we’ll help you work out whether a house-and-land purchase fits — and if it does, which property and which structure actually suit your fund.
Explore the properT network Family of Sites
SMSF property is one part of a much bigger picture. Our other sites cover investment property more broadly, by location and by strategy:
- properT network — our main site, covering property investment strategy across personal name, trust and SMSF ownership structures.
- Investment Property Queensland — investment property opportunities across Brisbane, South East Queensland and regional QLD.
- Investment Property Melbourne — investment property opportunities across Melbourne and Victoria.
- Downsizing for Retirement — downsizing and super contribution strategies for retirees.
This is general information only and does not take into account your personal objectives, financial situation or needs. It is not financial, legal or tax advice, and does not constitute a projection or promise of any return. Speak with your accountant or financial adviser before making any decision about your SMSF.