SMSF Property Loans | Business Premises & Refinancing

Find the Right SMSF Finance Pathway

Purchase commercial property

Explore borrowing for eligible offices, warehouses, industrial units, retail premises and other business real property.

Purchase your business premises

Assess finance for an eligible property your SMSF will own and lease to your operating business.

Refinance an existing SMSF loan

Review the rate, repayments, features and costs of an existing commercial or eligible residential SMSF property loan.

We work alongside your accountant, financial adviser and solicitor to coordinate the lending requirements.

Current SMSF Property Borrowing Rules

Changes effective from 10 August 2026 affect which property purchases can be financed through a new limited recourse borrowing arrangement.

The starting point is your transaction, the property’s use and when the relevant arrangements were entered into.

Your situation	What it means for finance
New purchase of business real property	Borrowing remains possible, subject to the SMSF rules and lender assessment.
New purchase of ordinary residential investment property	New borrowing is generally unavailable where the property does not qualify as business real property.
Existing residential SMSF loan	Qualifying earlier arrangements can continue and may be refinanced.
Binding purchase contract exchanged before 10 August 2026	Transitional provisions may apply, including where settlement occurs later.
Property purchase without borrowing	The borrowing change does not itself prevent the purchase; other SMSF investment rules still apply.

The legislation preserves qualifying earlier borrowing and acquisition arrangements.

Speak with us before signing a purchase contract or assuming an existing loan can be restructured.

What Is an SMSF Property Loan?

An SMSF property loan allows the trustee of a self-managed super fund to borrow for a permitted property acquisition.

The property is acquired for the fund. Rental income and relevant expenses form part of the fund’s finances, and the borrowing must comply with superannuation law.

It is a different transaction from buying an investment property personally. The ownership structure, permitted use, loan documents and repayment assessment all need attention.

How a Limited Recourse Borrowing Arrangement Works

SMSF property borrowing generally uses a limited recourse borrowing arrangement, commonly called an LRBA.

In a typical arrangement:

The SMSF trustee borrows to acquire a permitted single acquirable asset.
A separate holding trust holds legal title for the SMSF.
The SMSF receives the beneficial interest and services the borrowing.
The SMSF trustee has the right to acquire legal ownership after the required payments are made.

Recourse against the SMSF under the arrangement is restricted to the relevant asset. However, a lender may also require personal guarantees. Those obligations need separate legal review.

SMSF Commercial Property Loans

Commercial SMSF finance can support eligible property leased to an unrelated tenant or a related operating business.

Property types may include:

Offices and professional suites.
Warehouses, factories and industrial units.
Retail shops and showrooms.
Medical and allied health premises.
Other qualifying business real property.

The property must satisfy both the applicable superannuation rules and the lender’s security requirements. A lender may have additional restrictions concerning location, size, specialised use, condition or marketability.

Buying Your Business Premises Through an SMSF

For business owners, an SMSF property purchase can involve the fund owning eligible premises and leasing them to the operating business.

The assessment needs to consider:

Whether the property qualifies.
The proposed ownership and borrowing structure.
Market rent and commercial lease terms.
The business’s capacity to meet its lease obligations.
The fund’s ability to service the loan and other expenses.

Certain acquisitions from related parties are permitted, including qualifying business real property acquired at market value. This requires careful assessment of the transaction.

We can coordinate property finance alongside separate business or equipment funding requirements where needed.

Residential SMSF Property Loans

The position for residential property depends on the existing arrangements and the property’s use.

An ordinary new residential investment purchase generally cannot be financed through a new LRBA under the rules effective from 10 August 2026.

However, eligible existing residential loans can still be refinanced, and qualifying earlier purchase contracts may fall within transitional provisions.

Residential real property that meets the business real property definition requires its own assessment. The property’s label alone does not establish eligibility.

An SMSF may also purchase permitted residential property without borrowing, subject to the other investment restrictions.

SMSF Loan Refinancing

If your fund already has a property loan, refinancing may provide an opportunity to review its costs and structure.

We assess:

The existing balance, repayments and remaining term.
The proposed lender’s eligibility requirements.
Current property value and acceptable gearing.
The fund’s income, expenses and contribution position.
Available features and repayment options.
Discharge, establishment, valuation and legal costs.

Existing residential borrowers should have their refinancing options assessed separately from the restrictions on new purchases. Current lender guidance confirms continued availability for eligible transactions.

Refinancing remains subject to assessment and the borrowing rules. It does not provide general permission to release equity for unrelated purposes.

How Much Can Your SMSF Borrow?

Borrowing capacity depends on more than the fund’s current balance.

The assessment may be limited by:

The lender’s accepted property value.
Maximum loan-to-value ratio, or LVR.
Funds available for the purchase and expenses.
Sustainable repayment capacity.
Property type and location.
Existing commitments and lender policy.

The amount available is determined by the overall assessment. A property fitting within a lender’s maximum LVR does not, by itself, establish that the fund can obtain that loan.

Deposit and Upfront Funds

Your fund needs to account for the purchase contribution, transaction expenses and money remaining after settlement.

Illustrative purchase calculation

For a $1 million property, assuming an approved 70% LVR:

Item	Illustrative amount
Purchase price	$1,000,000
Loan	$700,000
Fund contribution towards the price	$300,000
Acquisition, advice and finance expenses	Additional
Funds retained for ongoing obligations	Additional

This is a calculation example, not a loan offer or an indication of eligibility.

The practical question is how much money the fund needs to complete the purchase and continue meeting its obligations.

How Lenders Assess Repayment Capacity

Depending on the lender and transaction, the assessment may consider rental income, acceptable super contributions, other fund income, expenses and existing debt.

Supporting information may also be required about members, guarantors or an operating business involved in the transaction.

Where the same business pays rent and makes contributions, those commitments need to be sustainable together.

We identify the evidence required by the proposed lender and help present the fund’s financial position clearly.

SMSF Loan Rates, Fees and Features

Compare the complete facility, including:

Interest rate and repayment type.
Loan term and any interest-only period.
Application, establishment and legal expenses.
Valuation and SMSF document-review fees.
Ongoing and discharge fees.
Offset availability and restrictions.
Additional repayment and redraw conditions.
Guarantees and other lending conditions.

Features and costs vary between products. A lower advertised rate may come with different fees, eligibility requirements or repayment conditions.

We explain the available offers so you can assess their effect on the fund’s cash flow.

Property Eligibility and Business Real Property

Business real property generally means land and buildings used wholly and exclusively in one or more businesses.

For borrowing subject to the new requirement, the property must qualify when the LRBA begins and continue qualifying throughout the arrangement.

Mixed-use property, vacant land, specialised premises and properties undergoing a change of use need closer review.

A purchase involving multiple titles also needs assessment under the single acquirable asset rules. One purchase contract does not automatically make separately saleable assets a single asset.

Holding Trusts and Purchase Documents

The SMSF, its trustee, the holding trustee and the purchase contract need to be coordinated correctly.

Your solicitor should review the proposed purchaser, trust documentation and transaction sequence before contracts are signed.

Errors can affect ownership, lending and duty treatment. Requirements can also depend on the state and transaction.

For example, Revenue NSW identifies specific conditions for SMSF custodian arrangements and related duty concessions. These should be checked for the individual purchase.

Repairs, Improvements and Construction

The funding rules distinguish between acquiring an asset, maintaining it and improving it.

Borrowed money under an LRBA can be used for permitted repairs and maintenance. It cannot be used to improve the asset.

Using the fund’s own money for works still requires assessment, including whether the works would change the asset into a different asset.

Construction, subdivision and substantial redevelopment proposals therefore require specialist review. An LRBA should not be treated as a standard construction facility.

Cash Flow After Settlement

The fund needs to meet its obligations after the property has been purchased.

Allow for:

Vacancies and changes in rental income.
Loan repayments and interest-rate movements.
Property expenses, insurance and maintenance.
Accounting, audit and administration costs.
Changes in member contributions.
Pension payments or other member benefits when payable.

Property can be difficult to sell quickly. Your fund’s investment planning needs to consider liquidity, concentration and the ability to meet expenses and benefits.

Client Experience: Business Premises and Business Acquisition

A Sunshine Coast client identified an opportunity to purchase a business and its premises.

The Brokerage worked with the client’s accounting and legal advisers to arrange the property acquisition through an SMSF structure, alongside funding for the business purchase, cash flow and equipment requirements.

The transaction involved coordinating several funding purposes and ownership considerations.

SMSF Property Loans & Finance