Important SMSF Property
Lending Update
There has been an important change to SMSF property lending that may affect anyone considering buying property through their super fund using borrowed money.
This update is particularly relevant if you were considering buying residential investment property through an SMSF using a Limited Recourse Borrowing Arrangement, commonly called an LRBA.
What Is Changing?
From 10 August 2026, SMSFs will generally no longer be able to use a new LRBA to buy standard residential investment property.
This does not mean SMSFs can no longer own property. It also does not necessarily mean existing SMSF property loans are immediately affected.
The main change is that new SMSF borrowing for property will generally need to relate to business real property. In plain English, that usually means property that is wholly and exclusively used in a business.
Why this matters
For many years, SMSFs have been able to borrow to buy residential investment property, provided the structure met the SMSF lending rules.
That pathway is now changing.
For residential property, the key issue is timing. If a contract is exchanged before 10 August 2026, the arrangement may be treated under the existing rules, even if settlement happens later.
However, the SMSF structure, trustee, bare trust, finance position, contract timing and legal documents all need to be handled properly.
This is not a “close enough” area.
What about commercial property?
Commercial property may still be possible through an SMSF using finance. However, the property needs to meet the business real property rules.
The important point is that the test is based on the actual use of the property, not just what the property is called or how it is zoned.
For example, a property being commercially zoned does not automatically make it eligible. Likewise, a property with a residential component may be problematic, even if part of it is used for business.
Mixed-use properties, caretaker residences, short-stay accommodation, serviced apartments, Airbnb-style properties and anything with private or residential use should be reviewed carefully before proceeding.
What if I already have an SMSF property loan?
Existing SMSF property loans may not be directly affected by the change.
However, you should be careful before refinancing, restructuring or changing the loan. A refinance may need to be reviewed to make sure it does not accidentally create a new arrangement that falls under the new rules.
Before making changes, you should get advice from your accountant, financial adviser, solicitor and lending specialist.
What should you do now?
If you were planning to buy residential property through your SMSF using finance, you should seek advice immediately. The timing is now tight, and you should not sign a contract unless the structure, finance and advice position have been properly considered.
If you are considering commercial property through your SMSF, that pathway may still be available, but the property needs to be assessed carefully.
If you already have an SMSF property loan, do not panic. The best next step is to review your position before making any changes.
HOW BROKERCO CAN HELP
BrokerCo can help you understand the lending side of SMSF property finance, including borrowing capacity, deposit requirements, lender policy, loan structure and the finance process.
If you do not already have the right professional team around you, we can help connect you with trusted specialists who understand SMSF property transactions. This may include financial advice through BrokerCo Advisory, as well as accountant and legal support where appropriate.
This information is general only and does not take into account your personal objectives, financial situation or needs. It is not financial, legal, tax or superannuation advice. You should obtain advice from appropriately qualified professionals before making any decision about SMSF property.
If this change affects something you were considering, please contact BrokerCo and we can help you understand the lending options.
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