Can IRA be used for real estate?

Yes. An IRA can hold real property as a permitted investment. The IRS does not prohibit IRAs from owning real estate. Standard custodians at major brokerages
don’t offer it as an option, but that’s a business decision, not a legal restriction.

To use IRA funds for real estate, you need to move the account to a self-directed IRA custodian that supports alternative assets. These are specialized financial
institutions built specifically to process real estate purchases, hold title, coordinate closings, and manage the ongoing administrative requirements of
IRA-owned property.

What qualifies: single-family rentals, duplexes, small multifamily properties, commercial buildings, raw land, agricultural property, tax lien certificates, and
notes secured by real estate. What doesn’t qualify: any property you or a disqualified person will use personally, and any transaction involving a
disqualified person on the other side of the deal.

For the purchase to work correctly, the IRA must be the buyer. All funds come from the IRA. Title goes to the custodian’s name for benefit of your IRA. From
there, all income flows into the account and all expenses come out of it. You cannot mix personal funds with IRA funds at any point.

The tax advantage is the core reason investors pursue this structure. Rental income inside a traditional self-directed IRA accumulates without creating an
annual taxable event. In a self-directed Roth IRA, qualifying distributions including years of accumulated rent and eventual sale proceeds come out entirely
tax-free.

If you want to purchase real estate with an IRA and your current custodian doesn’t allow it, you can transfer or roll over your existing balance to a
custodian for real estate IRA accounts without triggering tax or penalties, as long as the transfer is handled correctly as a direct rollover or
trustee-to-trustee transfer.