Self managed super fund loans

SMSF Loans

An SMSF loan, or limited recourse borrowing arrangement, lets a self managed super fund borrow to buy property held in a separate trust. Rules changed on 10 August 2026, so what your fund can buy depends on when the contract was signed. This is general information; speak to your SMSF adviser first.

Your self managed super fund (SMSF) can still borrow to buy commercial property. What has changed is residential property: since 10 August 2026 an SMSF can no longer take out a new loan to buy a home or residential investment property. We arrange SMSF lending for eligible commercial property and help funds with existing residential SMSF loans look at their refinancing options.

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What changed on 10 August 2026

New residential borrowing has ended. SMSFs can no longer enter into a new limited recourse borrowing arrangement (LRBA) to buy residential property.
Existing loans are grandfathered. Residential SMSF loans already in place can continue under the existing rules. Funds don't need to unwind them.
Refinancing is still possible. Existing residential SMSF loans can generally be refinanced, although lender appetite varies.
Commercial borrowing continues. An SMSF can still borrow to buy property that meets the definition of business real property.
Buying without a loan is unaffected. The change targets borrowing, so an SMSF can still buy residential property outright, subject to the usual super rules.

The ban was legislated as part of the Federal Government's 2026 tax reform package, which received Royal Assent on 26 June 2026. Purchases where the contract of sale was signed before 10 August 2026 can generally still proceed, even if settlement happens later.

What is an SMSF loan?

An SMSF loan lets your super fund borrow money to buy an investment property. It must be set up as a limited recourse borrowing arrangement (LRBA). The property is held in a separate holding trust (often called a bare trust) until the loan is repaid. If the loan defaults, the lender's claim is limited to that property, which protects the other assets in your fund.

For new purchases, SMSF loans are now limited to property that qualifies as business real property.

What property can an SMSF borrow to buy?

Business real property is generally land and buildings used wholly and exclusively in one or more businesses. Depending on how it's used, that can include:

Offices and professional suites
Shops and retail premises
Warehouses and industrial units
Medical and allied health practices
Some rural property used in a primary production business

Commercial zoning alone doesn't make a property eligible. Mixed-use property also needs careful consideration. Your SMSF accountant or licensed financial adviser should confirm a property qualifies before your fund signs a contract.

Buying your business premises through your SMSF

One of the most common uses of an SMSF loan is buying the premises your own business operates from. Your business can lease the property from the fund, as long as the lease is on commercial terms and the rent is at market rates. The rent goes into your super fund and helps meet the loan repayments.

Already have a residential SMSF loan?

Existing residential SMSF loans are grandfathered, so your fund can keep its current loan and property. Refinancing an existing arrangement also remains permitted. Lender appetite for residential SMSF loans varies, so it's worth knowing who will still refinance before your fixed rate ends or if your current rate is no longer competitive.

We can compare lenders that still refinance residential SMSF loans. Before changing anything about an existing arrangement, check with your SMSF accountant or adviser that the new loan stays within the rules.

How an SMSF commercial loan works

Get advice first. Your accountant or licensed financial adviser confirms that borrowing suits your fund and that its investment strategy allows it.
Find an eligible property. The property needs to meet the business real property rules and your fund's investment strategy.
Set up the holding trust. A separate holding trust (with its own trustee) is established to hold the property for your SMSF.
Apply for the loan. The lender assesses your fund's balance, contributions and the expected rental income from the property.
Settle and repay. Once the loan is approved the purchase settles. Your fund then makes repayments from rental income and contributions.

Loan features vary between lenders but can include principal and interest or interest only repayments, along with fixed, variable or split rates. SMSF loans usually need a larger deposit than a standard investment loan. Rates and fees are often higher too.

Things to weigh up

Complexity: SMSF borrowing involves legal, tax and super rules that must be followed carefully.
Costs: set-up fees, trust costs and higher interest rates can reduce returns.
Vacancy and liquidity: commercial property can sit empty for longer than residential property and it can take time to sell.
Concentration: a single property can make up a large share of your fund's assets.
Compliance: breaching the rules can lead to significant penalties and tax consequences.
Market risk: property values and rental income can fall.

Frequently asked questions

Can my SMSF still borrow to buy residential property?

Under the 2026 changes, new SMSF borrowing for residential property is restricted for contracts signed on or after 10 August 2026. Existing loans and earlier contracts are treated differently. See 'What changed on 10 August 2026' above and get advice before acting.

Can my SMSF buy my business premises?

Commercial property, including premises your business leases from the fund at market rent, can still be bought with an SMSF loan, subject to the fund's investment strategy and lender policy.

Talk to us about an SMSF loan

Whether your fund is buying commercial property or refinancing an existing loan, we'll look across our panel of 50+ lenders for the options that fit.

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Or call us on (07) 3194 0888