SMSF Property Loans in Australia (2026): The New Rules, and Buying Commercial Property in Your Super

SMSF Property Loans in Australia (2026): The New Rules, and Buying Commercial Property in Your Super

The rules for borrowing inside a self-managed super fund have just changed, and the change is clearer than the headlines suggest. From 10 August 2026, a new SMSF can no longer take out a loan to buy a residential investment property. What tends to get lost in the noise is the other half of the story: an SMSF can still borrow to buy commercial premises, and an SMSF commercial property loan remains a legitimate, still permitted way for a business owner to hold their own premises inside super. This guide sets out exactly what changed, what an SMSF can and cannot still do, and how commercial SMSF lending actually works, in plain language from brokers who arrange it. It is general information only, and we point out clearly below where you need a licensed financial adviser and your accountant. Update: the residential side of these reforms is now law, commencing 10 August 2026; our deadline explainer covers grandfathering, the contract-date rule and refinancing.

What changed for SMSF property borrowing in 2026?

For most of the past decade, a self-managed super fund could borrow to buy either residential or commercial property through a limited recourse borrowing arrangement, or LRBA. That door has now been narrowed. Legislation that received Royal Assent on 26 June 2026 restricts new SMSF property borrowing to business real property only, under section 67A(2)(c) of the SIS Act. In practice, from 10 August 2026 a new SMSF loan can no longer be used to buy a residential investment property.

The date that matters is the contract date, not the settlement date. To be grandfathered under the old rules, the contract to buy the residential property must have been exchanged before 10 August 2026. If your fund already holds a residential property under an existing LRBA, nothing forces you to unwind it. Existing loans continue on their terms, and they can still be refinanced to a different lender or a better rate.

The second change is a tax rather than a lending rule. From 1 July 2026, a new measure called Division 296 applies an extra tax on the superannuation earnings of individuals whose total super balance sits above $3 million. It does not stop anyone borrowing, but it changes the maths of holding very large balances inside super, so it belongs in any honest 2026 SMSF discussion. We explain how it works further down. For now, the key point is that how it applies to you personally is a question for your accountant and a licensed financial adviser, not for a broker.

Can an SMSF still borrow to buy property?

The blunt headline you may have seen, that SMSF property loans are finished, is not correct. What has ended is new residential SMSF borrowing. New commercial borrowing is very much alive. An SMSF can still take out a loan to buy business real property, which means commercial premises used wholly and exclusively in the running of a business, such as a warehouse, a shopfront, a consulting room or an office suite.

There are three separate situations worth keeping straight, because the right answer depends entirely on which one you are in:

• Buying commercial property with a loan. Still permitted, through an LRBA with a specialist lender. This is the core of what we arrange.
• Buying residential property. An SMSF can still purchase it outright with the fund's own cash. It simply can no longer borrow to do so for a new purchase.
• An existing SMSF loan of any kind. Grandfathered, so it continues on its terms and can be refinanced to a sharper rate or a different lender.

Working out which of these three applies to you, and whether the numbers stack up, is the first thing we do together. The rest of this guide focuses on the one that the 2026 changes leave wide open: commercial SMSF lending.

How does an SMSF commercial property loan work?

An SMSF commercial property loan is structured through a limited recourse borrowing arrangement. While there is a loan over the property, the fund does not hold it directly. Instead the property sits in a separate holding trust, sometimes called a bare trust, with the SMSF as beneficial owner. The lender's recourse is limited to that single asset, which is the whole point of the structure: if something goes wrong, the lender can pursue the property in the holding trust but not the fund's other assets. That protection is why the paperwork is more involved than an ordinary purchase.

The lending market for these loans is specialist. No Big Four bank currently offers SMSF LRBAs, so the field is made up of non-bank and specialist lenders who understand the structure. Indicative maximum loan-to-value ratios sit around 65 to 75 per cent for commercial property, with the fund providing the balance from its own cash. Every figure here is indicative and subject to each lender's criteria, and we do not publish a headline interest rate, because SMSF rates are quoted case by case and move with the market.

Lenders also look closely at the fund itself. As a rough guide, most want a minimum SMSF balance in the region of $200,000 to $300,000, plus a liquidity buffer left in the fund after the purchase so it can meet expenses, insurance and any pension payments. Serviceability is assessed on the rent the property will earn plus the ongoing contributions flowing into the fund. And the property must satisfy the sole-purpose test, meaning it is held solely to provide retirement benefits to members, not to deliver a present-day benefit to anyone.

Indicative only and subject to change. Actual terms depend on the lender, the property and your fund. This is general information, not a loan offer or credit advice.

Buying your business premises through your SMSF

For business owners, this is where the 2026 rules stay genuinely useful. Business real property is the key exception to superannuation's in-house asset rules. Ordinarily an SMSF is tightly limited in how much it can invest in, or transact with, parties related to its members. Commercial premises used wholly and exclusively in a business are carved out of that restriction, which opens up a well established strategy: your SMSF owns the commercial premises, and your business leases them back from the fund.

Done properly, the rent your business pays flows into your own retirement savings rather than to an unrelated landlord, and the fund holds a tangible commercial asset. Because this involves borrowing to buy commercial rather than residential property, it remains permitted after 10 August 2026. It is one of the few SMSF borrowing strategies the changes leave fully intact, which is why we expect it to become more, not less, common as the residential door closes.

The condition that makes or breaks it is arm's length. The lease has to be genuine: a proper written agreement, rent set at true market rates, paid on time, on commercial terms. The ATO watches related-party leases closely, and a mates-rates arrangement or missed rent can create serious compliance problems. It also has to suit your wider financial picture, which is exactly the sort of question a licensed financial adviser and your accountant should sign off before you commit. Our role is to arrange the lending once that strategy is set.

What is the Division 296 tax, and who does it affect?

Division 296 is a new tax on superannuation earnings that starts on 1 July 2026. It applies to individuals whose total super balance is above $3 million. The first assessment is based on balances at 30 June 2027, and the first bills are expected from the 2027 to 2028 year onward.

Under the law as passed, the extra tax is an additional 15 per cent on the earnings attributable to the portion of a balance between $3 million and $10 million, and an additional 10 per cent on the portion above $10 million. Importantly, it is calculated on a realised-earnings basis, and the thresholds are indexed over time. It sits on top of the tax a fund already pays, and it applies to the individual rather than only to an SMSF, so it can affect anyone with a large balance in any type of super fund.

Calculated on a realised-earnings basis, thresholds indexed over time. First assessment at 30 June 2027, first bills from 2027 to 2028. General information only, not tax advice; confirm your position with your accountant.

A handful of other super settings also changed from 1 July 2026, which matter when you are planning contributions into a fund that owns property:

The general transfer balance cap, which limits how much can move into the tax-free retirement phase, rose to $2.1 million. None of this is advice about what you should do. It is background, and the numbers move over time, so treat every figure here as general information and confirm your own position with your accountant and a licensed financial adviser before acting.

Can you refinance an existing SMSF loan?

The 2026 changes restrict new borrowing, they do not cancel existing loans. An SMSF loan that was in place before 10 August 2026, including a residential one, is grandfathered. It continues on its terms, and you are free to refinance it to a different lender or a sharper rate.

This matters more than it might sound, because the SMSF lending market has always been specialist and it moves. With no Big Four bank competing in the space, an SMSF loan that has sat untouched for a few years is often on terms that are no longer competitive, and reviewing it can free up cash flow inside the fund. We regularly help trustees refinance both residential and commercial SMSF loans, and you can read more in our guides to refinancing a commercial property loan and business loan refinancing. Refinancing an SMSF loan is a normal part of what we arrange.

What are the key SMSF lending rules and risks?

SMSF borrowing is powerful, but it is not simple, and the rules exist for good reasons. A few matter more than the rest:

• The sole-purpose test. The property must be held solely to provide retirement benefits to members. It cannot deliver a present-day benefit to you or your family.
• Arm's length dealing. Every transaction, including any lease back to a related business, must be on genuine commercial terms at market rates.
• No living in it, no related-party residential tenants. A member or relative cannot live in an SMSF-owned residential property, or rent it. This is why residential SMSF property has always been an investment, never a home, and it is another reason commercial premises are often the cleaner fit.
• Liquidity. The fund has to keep enough cash to meet loan repayments, expenses, insurance and any pensions. Tying up too much in a single property is a real risk.
• Less flexibility. Property inside super is harder and slower to sell than shares, the structure costs money to set up and run, and unwinding it is not trivial.

None of that means an SMSF loan is a bad idea. It means it is a considered decision that has to fit your retirement plan, your tax position and your fund's cash flow. That is precisely why it should never be a solo decision. A broker arranges the finance; the question of whether an SMSF and a property purchase suit you at all belongs with a licensed financial adviser and your accountant.

How Everstone arranges SMSF commercial lending

We are independent finance and mortgage brokers, and we are former bankers, so we know both how lenders assess these deals and where the good SMSF lenders actually sit. Because no Big Four bank offers SMSF LRBAs, the difference between a workable loan and a dead end often comes down to knowing which specialist lenders are active, what each one wants to see, and how to present your fund. That is the part we do, and it is genuinely a service we offer: arranging SMSF commercial property loans for business owners and investors.

Just as importantly, we know our lane. Everstone Finance arranges the lending. We do not advise you on whether to set up an SMSF, whether to buy property in super, or on your tax and retirement strategy, that is licensed financial advice, and it belongs with your adviser and accountant. We are happy to work alongside them, translate the finance side into plain English, and line up the loan once the strategy is agreed. There is no cost to you for our help, because we are paid by the lender, and our recommendation has to meet the Best Interests Duty. If you also want the broader picture, our guide to commercial property loans in Australia is a good place to start.

Frequently asked questions

Can an SMSF still borrow to buy property in 2026?

Yes, for commercial property. From 10 August 2026 a new SMSF can no longer borrow to buy residential property, but it can still borrow to buy business real property, meaning commercial premises used wholly and exclusively in a business. An SMSF can also still buy residential property outright with its own cash, and any loan already in place before the change is grandfathered.

Can I buy my business premises through my SMSF?

Yes, and it remains one of the few SMSF borrowing strategies the 2026 changes leave fully intact. Business real property is an exception to super's in-house asset rules, so your SMSF can own your commercial premises and lease them back to your business, provided the lease is genuinely at arm's length with proper market rent. Whether it suits you is a question for your financial adviser and accountant.

What is the Division 296 super tax?

Division 296 is an extra tax on superannuation earnings for individuals with a total super balance above $3 million, starting 1 July 2026, with the first assessment at 30 June 2027 and first bills from 2027 to 2028. It adds 15 per cent on earnings attributable to the portion of a balance between $3 million and $10 million and 10 per cent above $10 million, on a realised-earnings basis, with the thresholds indexed. This is general information, not tax advice.

Can I refinance an existing SMSF loan?

Yes. Existing SMSF loans, including residential ones taken out before 10 August 2026, are grandfathered and can be refinanced to a different lender or a better rate. Because no Big Four bank operates in this market, an older SMSF loan is often no longer competitive, so a review can be worthwhile. Refinancing SMSF loans is a service Everstone arranges.

Do I need a financial adviser as well as a broker for an SMSF loan?

Yes. A broker arranges the lending, but the SMSF strategy and the tax questions are for a licensed financial adviser and your accountant. Everstone Finance is a finance and mortgage broker, not a financial adviser, so we handle the loan and work alongside your advisers rather than replacing them. This is general information only, not financial, tax or credit advice.

How much do I need in my SMSF to buy commercial property?

As a rough guide, specialist lenders look for a minimum SMSF balance in the region of $200,000 to $300,000, plus a liquidity buffer left in the fund after settlement to cover repayments, expenses, insurance and any pension payments. Indicative maximum LVRs sit around 65 to 75 per cent, so the fund provides the balance. Every figure is indicative and subject to each lender's criteria. This is general information, not credit advice.

Do the big four banks offer SMSF loans?

No. No Big Four bank currently offers SMSF limited recourse borrowing arrangements. The market is served by specialist non-bank and specialist lenders who understand the structure, which is why an older SMSF loan is often no longer competitive and worth reviewing. Everstone arranges SMSF commercial lending and refinancing with these specialist lenders.

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