SMSF Loans Australia

SMSF Trustee — Commercial Property

Under current ATO rules, new LRBAs can only acquire business real property. We help compliant SMSF trustees explore commercial property lending — identifying specialist lenders who actively write SMSF commercial loans and understanding the compliance requirements.

Business Owner — Buy Premises via SMSF

Purchasing your business premises inside your SMSF and leasing it back at market rent is one of the few related-party transactions the ATO permits. The lease must be on arm's-length terms and the property must be business real property. We help structure this correctly.

Commercial Property Investor via SMSF

Commercial property held inside an SMSF benefits from the fund's concessional tax rate on rental income (15% in accumulation, potentially 0% in pension phase). We identify specialist lenders and help structure the LRBA to meet all compliance requirements.

Existing Residential LRBA Holder

If your SMSF entered a residential LRBA before the rule change, your arrangement is fully grandfathered — no forced unwind is required. We help existing residential LRBA holders understand their ongoing compliance obligations, refinancing options and lender requirements.

SMSF with Adequate Balance

Lenders apply strict minimum balance requirements for SMSF lending — commonly $200,000 or more. The fund must also demonstrate it can service the loan from rental income, member contributions and other fund income. We model serviceability before you approach any lender.

Well-Structured SMSF

Not all SMSFs can borrow. The trust deed must expressly permit LRBA borrowing, a corporate trustee or properly appointed individual trustees must be in place, and the fund must have a current audit. We check these requirements before any lender approach.

The only type of new LRBA available under current ATO rules. Secured by business real property held in a separate holding trust. Rental income, member contributions and fund income assessed for serviceability. Specialist lenders only.

Residential LRBAs entered before the ATO rule change are fully grandfathered — no forced unwind, no compliance risk from continuing the arrangement. Refinancing options exist, subject to lender appetite. New residential LRBAs are not available.

Refinancing an existing commercial or residential LRBA to a better rate — or from a non-bank to a bank lender as the fund's balance grows. Lenders will reassess the fund's current position, deed, compliance status and property value at the time of refinance.

Can an SMSF still borrow to buy property?

Under current ATO rules, new Limited Recourse Borrowing Arrangements (LRBAs) are restricted to business real property (commercial) only. New LRBAs for residential property are no longer available. Existing residential LRBAs entered into before the rule change are fully grandfathered and do not need to be unwound. See ato.gov.au for effective dates and further detail.

What property can an SMSF borrow to buy under current rules?

New LRBAs can only acquire business real property — commercial, industrial or mixed-use property held for the fund's sole purpose of providing retirement benefits. The property must be a single acquirable asset. Commercial property can be leased to a related party at market (arm's-length) rent. Residential property borrowing is no longer available for new LRBAs under current ATO rules; existing arrangements are grandfathered.

What is a limited recourse borrowing arrangement (LRBA)?

An LRBA is the only way an SMSF can legally borrow to purchase an asset. Under an LRBA, the asset is held in a separate holding trust until the loan is fully repaid, at which point it transfers into the SMSF. If the SMSF defaults, the lender's recourse is limited to the single asset in the holding trust — it cannot access the SMSF's other assets.

How much can an SMSF borrow for commercial property?

SMSF lenders typically lend up to 65–70% of the commercial property's value. Lenders also apply minimum fund balance requirements and assess serviceability using the SMSF's rental income, member contributions and other fund income. The SMSF must demonstrate it can service the loan solely from within the fund.

What are the risks of using an SMSF to borrow?

Key risks include concentration risk (a large portion of the fund in one asset), a limited lender market with stricter criteria, liquidity risk if the fund cannot meet expenses or pension payments, and strict compliance obligations under the SIS Act. Members with high super balances may also face Division 296 tax on earnings including unrealised capital gains — see ato.gov.au for current thresholds. Non-compliance can trigger penalties or loss of the fund's complying status. Independent legal, financial and tax advice is strongly recommended.