SMSF Lending
Commercial Property, Business Real Property, and the Changing SMSF Landscape.
Self-managed superannuation funds have long been one of the most powerful structures available to Australian business owners for building and holding wealth. Used correctly, and in the right combination with other entities in a group structure, an SMSF can deliver significant tax efficiency, asset protection, and long-term wealth accumulation.
The lending landscape for SMSFs has changed materially in 2026. Understanding what has changed, what has not, and what that means for your strategy is where we start every conversation in this space.
What Changed in June 2026
On 23 June 2026, the Federal Parliament passed legislation that removes the ability for SMSFs to establish new Limited Recourse Borrowing Arrangements to acquire residential property. The ban does not commence until Royal Assent, expected approximately 45 days later, around mid-August 2026.
A Limited Recourse Borrowing Arrangement, known as an LRBA, is the structure that allows an SMSF to borrow money to purchase an asset held inside a bare trust. The limited recourse feature means that if the loan defaults, the lender can only claim that one asset. The rest of the fund’s assets remain protected.
The legislation prohibits SMSFs from entering into a new borrowing arrangement to acquire residential property. Real property that constitutes business real property will still be able to be acquired using an LRBA, and existing arrangements are expected to be grandfathered and allowed to continue.
This is an important distinction. The ban applies to residential property only. Commercial property, business real property, and other asset classes including shares and managed funds held inside an SMSF are unaffected.
What Has Not Changed
For the clients we work with, the 2026 legislative changes have limited direct impact. Our focus in this space has always been commercial property and business real property, and that market remains fully open.
Property that qualifies as business real property under section 66 of the Superannuation Industry (Supervision) Act continues to meet the LRBA rules. Many business owners will therefore feel no impact from the change.
The tax settings that make an SMSF a compelling structure, combined with the ability to borrow against commercial property through an LRBA, continue to make it a highly effective vehicle for business owners acquiring their own premises or building a commercial property portfolio within their retirement savings.
How We Work in This Space
Our SMSF lending work sits almost exclusively in commercial property and business real property. The clients we work with typically hold an SMSF as part of a broader group structure, alongside trading entities, trusts, and other investment vehicles, and the SMSF plays a specific role in that structure rather than operating in isolation.
The funding conversation here is not simply about securing a loan. It is about understanding how the SMSF facility fits within the group’s overall debt position, how the asset aligns with the fund’s investment strategy and compliance obligations, and how the structure interacts with the client’s tax position across every entity in the group.
We work closely with our clients’ accountants and financial advisers throughout. SMSF lending intersects with superannuation law, taxation strategy, and investment compliance in ways that require a coordinated approach across the advisory team. We do not provide financial or superannuation advice, and we work alongside advisers who do. Our role is to understand the credit requirement, structure the facility appropriately, and manage the transaction through to settlement.
Lenders in this space are predominantly specialist non-bank lenders, each with different appetite, LVR limits, and assessment criteria. The right lender depends on the asset type, the fund’s balance and investment strategy, and the borrowing structure.
For more on how we approach every client engagement, visit our How We Work page.
The Types of Commercial Transactions We Work On
Your own commercial premises
Business owners purchasing their own commercial premises through their fund, one of the most common and effective SMSF strategies.
Commercial property investment
Commercial property held within an SMSF as part of a broader portfolio and investment strategy.
Mixed-use acquisitions
Mixed-use property acquisitions where business real property forms part of the asset.
Getting the structure right
SMSF LRBAs carry specific requirements. The bare trust, the limited recourse feature and the arm's length rules must be correctly established before a lender will proceed.
The Tax Settings That Still Apply
15% in accumulation
Income earned inside a fund during the accumulation phase is taxed at 15%.
0% in pension phase
Once a fund moves into pension phase, the tax rate on that income reduces to zero.
CGT discount
Capital gains on assets held more than twelve months in accumulation phase attract a one-third discount on the standard 15% rate.
Borrow against commercial property
You can still borrow against commercial and business real property through an LRBA, keeping the SMSF an effective vehicle for acquiring your own premises.
Start the Conversation
A note on the current environment. The 2026 legislative changes have created a period of uncertainty in the SMSF lending market. When a similar policy was proposed in 2019, all four major banks withdrew their SMSF residential lending products before any law passed. There is a reasonable possibility that some lenders will reduce or withdraw SMSF lending products more broadly in response, even where commercial property remains unaffected by the ban.
We are monitoring the lender market closely and will keep our clients informed as the picture becomes clearer. If you are considering an SMSF commercial property acquisition in the near term, bringing the funding conversation forward is prudent.
SMSF lending for commercial property is a specialist area that rewards early planning and a coordinated approach across your advisory team. Book a strategy call with Yasmine. Bring your group structure, the asset you are considering, and your accountant’s contact details, and we will work through the funding options and ensure the right people are involved from the outset.