SMSF structure
SMSF bare trust: how LRBA property loans work
If your SMSF wants to borrow money to buy property, super law requires the property to be held inside a separate bare trust until the loan is paid off. This is the structure that makes Limited Recourse Borrowing Arrangements (LRBAs) legal under section 67A of the SIS Act — and the structure every SMSF property lender will ask you for.
How the bare trust fits into an SMSF property purchase
Under an LRBA the lender's recourse is limited to the single asset being acquired — they cannot pursue the rest of the SMSF's assets if the loan defaults. To make that work legally, the asset has to be held by a separate legal entity (the bare trustee) on behalf of the SMSF. The SMSF beneficially owns the asset and pays the loan; the bare trustee just holds legal title.
Once the loan is fully repaid, the bare trustee transfers legal title to the SMSF trustee. In most states this final transfer is exempt from stamp duty under the LRBA concession, provided the bare trust deed and loan documents were set up correctly from day one. This is where most LRBA disputes happen — get the structure wrong at the start and you can lose the concession at the end.
easySMSF includes the bare trust deed and bare trustee Pty Ltd in our LRBA setup package, and we work with the major SMSF property lenders directly so you don't have to chase legal back-and-forth between us and the lender.
- Bare trust deed drawn from current SIS Act and ATO guidance
- Bare trustee Pty Ltd registered with ASIC as a special-purpose company
- Lender-ready documentation — works with the major SMSF property lenders
- State-specific stamp duty handling (VIC, NSW, QLD, WA, SA concessions)
- Continues to work for refinances and partial loan repayments
- Audit-ready holding trust accounts from year one