SMSF property lending, done correctly.

SMSF lending is a specialist niche, and the rules changed on 10 August 2026. New SMSF borrowing is now limited to business real property. Existing residential SMSF loans continue and can still be refinanced. Limited recourse borrowing, bare trust structures and a specialist lender panel mean the broker's job is as much about knowing the rules as finding a rate.

New rules from 10 August 2026.

The Treasury Laws Amendment (Tax Reform No. 1) Act 2026 amended the Superannuation Industry (Supervision) Act so that any new limited recourse borrowing arrangement over real property must be for business real property. In practice, from 10 August 2026 an SMSF can no longer borrow to buy a residential investment property.

Three things did not change. Residential loans entered into before 10 August 2026 are grandfathered and continue as normal, with no forced sale or LVR reset. An existing residential SMSF loan can still be refinanced to another lender. And an SMSF can still borrow to acquire commercial property that qualifies as business real property, including premises used by a member's own business.

LRBAs, bare trusts and the rules that apply.

An SMSF loan is structured as a Limited Recourse Borrowing Arrangement (LRBA). The SMSF doesn't hold the property directly during the loan term. A separate bare trust (sometimes called a custodian trust or holding trust) holds legal title, and the SMSF holds the beneficial interest. If the loan defaults, the lender's recourse is limited to the specific asset inside the bare trust, not the rest of the SMSF's assets. That's the 'limited recourse' in LRBA.

Beyond that, the single acquirable asset rule, the in-specie contribution limits, related party transaction restrictions, and lender liquidity tests all apply. Liquidity policy now varies widely by lender. Some require no liquid assets after settlement, others want around 5% of the loan balance or a set number of months' repayments held in cash or liquid assets, and most set a minimum fund balance, commonly between $150,000 and $250,000. Several lenders will only lend to a fund with a corporate trustee. Get any of this wrong and the ATO can take action.

Two paths.

SMSF residential

Refinancing and reviewing existing residential SMSF loans. New residential borrowing is no longer permitted from 10 August 2026.

SMSF residential

SMSF commercial

The only path for new SMSF property borrowing. Business real property, including premises used by your own business, with LVRs commonly up to 80%.

SMSF commercial

SMSF lending FAQs

Why is the SMSF lender panel so small?

The major banks and most second-tier banks do not accept SMSF applications. The active panel is a group of non-bank and specialist lenders, each with its own rules on LVR, liquidity, trustee type and loan size. This is where broker panel depth matters.

What LVR can the SMSF borrow to?

Commercial SMSF loans are commonly available up to 80% LVR, with a small number of specialist lenders going higher for metro securities. Refinances of existing residential SMSF loans are also commonly available up to 80%, and some lenders will go higher. Interest-only terms usually carry a lower cap, and regional securities are often capped lower again.

Can the SMSF borrow to buy a property I already own?

Not if it's residential. Related-party residential acquisitions were always prohibited, and since 10 August 2026 an SMSF cannot borrow to buy residential property from anyone. Yes, if it's commercial and the property is business real property, meaning land and buildings used wholly and exclusively in one or more businesses. This exception is one of the strongest reasons to look at SMSF commercial lending.

My SMSF already has a residential loan. Is it affected?

No. Arrangements entered into before 10 August 2026 are grandfathered, and contracts exchanged before that date are protected even where settlement happened afterwards. The loan continues on its existing terms and can be refinanced. Many older SMSF loans were written at pricing well above what the specialist panel offers today, so a review is worth doing.

Can my SMSF still buy residential property without borrowing?

Yes. The change only restricts borrowing. A fund with enough capital can still acquire residential property outright, subject to the usual sole purpose, related-party and in-house asset rules. Whether that suits your fund is a question for your financial adviser, not a broker.

Important: SMSF lending decisions involve superannuation, tax, and legal considerations that sit outside the scope of mortgage broking. Nothing on this page is financial product advice. Always coordinate with your financial adviser, accountant, and SMSF specialist before acting on any SMSF lending information. Rules described here reflect the Treasury Laws Amendment (Tax Reform No. 1) Act 2026 and lender policy as at September 2026, and can change.

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