Self-Managed Super Fund (SMSF) Loans
SMSF Property Loans & Commercial Property Finance
A Self-Managed Super Fund may use borrowing to purchase eligible property, but the rules are very different from standard home lending.
New LRBAs involving real property must generally be used to acquire business real property.
This means new SMSF borrowing for ordinary residential investment property is generally no longer available.
At My Finance Consultants, we help eligible SMSFs compare property lending options and coordinate the finance process.
We work alongside your financial adviser, accountant and solicitor so the lending structure aligns with the required SMSF documentation.
What Can an SMSF Buy?
Business Real Property
New SMSF property borrowing can generally be used for qualifying business real property.
Business real property broadly means land and buildings used wholly and exclusively in one or more businesses.
Examples can include eligible offices, warehouses, factories, retail premises and professional consulting rooms.
The property must satisfy both superannuation law and the lender's security requirements.
Property Used by Your Business
An SMSF may, in appropriate circumstances, lease qualifying business real property to a related business.
The arrangement must satisfy the relevant superannuation requirements and operate on arm's-length commercial terms.
This can make SMSF commercial property particularly relevant for some business owners and professional practices.
Your accountant, financial adviser and solicitor should confirm the structure before any contract is signed.
Residential Property
An SMSF can still hold residential property as an investment where the superannuation rules are satisfied.
However, a new LRBA generally cannot be established to borrow for ordinary residential real property.
An SMSF may still purchase residential property without borrowing where it has sufficient fund assets and the investment is otherwise permitted.
How SMSF Property Borrowing Works
Limited Recourse Borrowing Arrangements
Eligible SMSF property borrowing is generally structured through a Limited Recourse Borrowing Arrangement, or LRBA.
The property is held under the required legal structure while the borrowing remains outstanding.
If the arrangement defaults, the lender's rights are generally limited to the asset held under that LRBA, subject to the loan documents and applicable law.
SMSF lending structures are technical and should be established before entering contracts or transferring funds.
Deposit & LVR
SMSF property loans commonly require a larger contribution than standard residential home loans.
Maximum LVRs vary depending on the lender, property type, location, lease and overall application.
The fund also needs enough cash for stamp duty, legal costs, lender fees and other acquisition expenses.
Maintaining sufficient liquidity after settlement is also important.
There is no universal minimum SMSF balance that makes a property strategy appropriate.
Fund size, diversification, costs and cash flow should be considered as part of professional financial advice.
Loan Repayments
Repayments may be supported by rental income and eligible cash already held within the SMSF.
Superannuation contributions may also increase fund cash flow, subject to contribution rules and limits.
The fund should be able to manage vacancies, property expenses and changes in interest rates without relying on unrealistic assumptions.
Existing Residential SMSF Loans
Residential LRBAs entered into before 10 August 2026 are not automatically cancelled by the new rules.
Existing arrangements can generally continue subject to the applicable requirements.
Refinancing of qualifying existing residential LRBAs may also remain possible under the transitional rules.
This means SMSF trustees with an existing residential property loan may still have opportunities to review their lender, rate and loan structure.
We confirm whether the existing arrangement falls within the current rules before comparing refinance options.
Key SMSF Property Considerations
Sole Purpose & Investment Strategy
An SMSF must be maintained for the purpose of providing retirement benefits to its members.
Property investment should also be consistent with the fund's documented investment strategy and overall financial position.
SMSF trustees remain legally responsible for compliance even when professional advisers are engaged.
Personal Use
Residential SMSF property generally cannot be used as a home or holiday property by fund members or their relatives.
Business real property can operate differently where a related business occupies the premises under an eligible commercial arrangement.
The distinction should be confirmed before purchasing.
Repairs, Improvements & Borrowing
LRBA rules can restrict how borrowed funds are used after acquisition.
Repairs, maintenance, improvements and replacement assets can have different treatment.
Do not assume that renovation or development costs can simply be added to an SMSF property loan.
Professional advice should be obtained before changing the property or funding additional works.
Costs & Liquidity
SMSF property ownership can involve lender fees, legal costs, accounting, audit expenses, rates, insurance and property management costs.
SMSFs also have ongoing administration and compliance expenses.
ASIC notes that the cost-effectiveness of an SMSF depends on the member's circumstances and should not be determined by a minimum-balance rule.
Our SMSF Property Loan Process
Lending Assessment
We review the proposed property, SMSF structure, available contribution and borrowing requirements.
For new borrowing, we determine whether the proposed property may meet the lender's SMSF and business-real-property requirements.
Compare Suitable Lenders
We compare available SMSF lenders based on LVR, rates, fees, property policy and documentation requirements.
For existing residential LRBAs, we can also investigate whether refinancing is available under the transitional rules.
Structure & Documentation
We coordinate the lending requirements with your SMSF accountant, financial adviser and solicitor.
The correct entities, trust documentation and purchasing structure should generally be established before contracts are finalised.
Application & Settlement
We prepare the loan application and coordinate the required financial, SMSF and property documents.
We then manage lender questions, valuation requirements and approval through to settlement.
After settlement, we can periodically review whether the SMSF loan remains competitive.
Frequently Asked Questions
Can My SMSF Borrow to Buy a Residential Investment Property?
Generally not under a new LRBA entered into from 10 August 2026.
New real-property LRBAs must generally involve qualifying business real property.
Can an SMSF Still Buy Residential Property?
An SMSF may still acquire residential investment property without borrowing where the purchase satisfies the applicable superannuation rules.
What Is Business Real Property?
Business real property broadly means real property used wholly and exclusively in one or more businesses.
The exact property and use should be assessed before entering a contract.
Can My Business Lease Property From My SMSF?
Qualifying business real property may be leased to a related business where the superannuation requirements are satisfied and the arrangement is on arm's-length terms.
Can I Refinance an Existing Residential SMSF Loan?
Potentially. Existing residential LRBAs entered into before 10 August 2026 and qualifying refinances are preserved under the new rules.
How Much Deposit Does an SMSF Need?
There is no single deposit requirement.
The maximum LVR depends on the lender, property, lease and overall application.
SMSFs should also retain enough funds for purchasing costs and ongoing liquidity.
Can I Live in a Property Owned by My SMSF?
Generally, no for residential investment property.
SMSF assets must comply with strict superannuation rules and cannot simply be used for the personal benefit of members.
Do I Need Professional Advice?
SMSF property transactions can involve credit, financial advice, tax, superannuation and legal issues.
We provide lending assistance and can coordinate with your licensed financial adviser, SMSF accountant and solicitor before you proceed.