Buy Your Business Premises With a Commercial SMSF Loan
Own the NSW premises your business already rents, and pay that rent into your own super fund instead of a landlord’s account. A commercial SMSF loan lets your self-managed super fund (SMSF) borrow against the property under a limited recourse arrangement, so the purchase is funded from super and not from the business.
What Changed for SMSF Borrowing on 10 August 2026
From 10 August 2026, an SMSF can only enter a new limited recourse borrowing arrangement (LRBA) over real property where that property is business real property. The change came through the Treasury Laws Amendment (Tax Reform No. 1) Act 2026, and the Australian Taxation Office (ATO) published its guidance on 28 July 2026.
Business real property means land and buildings used wholly and exclusively in one or more businesses. Your own business can be the occupant, which is the exception that makes this work for owner-operators. The identity of the lender makes no difference to the test, so a bank, a non-bank and a related-party loan are all treated the same way.
Arrangements already in place are not affected, since the new test applies only to those entered into on or after that date.
Commercial property is now the only path for a new SMSF property borrowing. Whether it belongs in your fund at all is a question for your accountant or a licensed financial adviser, since that decision sits under an Australian financial services licence and not a credit licence. What we handle as your Sydney mortgage broker is the lending.
What Counts as Business Real Property
The property test decides whether a purchase can be financed at all:
Premises Your Business Occupies
An office, warehouse, workshop, retail shop or consulting suite that your own business runs from. The fund buys it, your business leases it back at market rent, and the lease has to be on arm’s length terms and documented.
Property Leased to Another Business
A commercial property tenanted by an unrelated business meets the test the same way, provided the use stays wholly and exclusively business use. The tenant’s occupation is what carries the test, so a vacancy puts that test at risk.
Land Used in Primary Production
Farmland can qualify, and the ATO accepts that a dwelling used for private purposes on that land does not automatically disqualify it. The area and use of the dwelling are what matter, so this one is worth confirming before you commit.
Property That Does Not Qualify
Residential investment property, holiday properties and anything with mixed private use fall outside the test for new arrangements. The fund may still own residential property outright, but it can no longer borrow to acquire it under a new LRBA.
How the Structure Works
An SMSF purchase runs through more moving parts than an ordinary commercial loan, and each one has to exist before settlement:
Holding Trust
The property is held in a separate trust, sometimes called a bare trust, with the fund holding the beneficial interest. The trust and its trustee need to be established before contracts are exchanged, because fixing the order afterwards can create a stamp duty problem.
Single Acquirable Asset
One LRBA finances one asset. A second property means a second arrangement, a second holding trust and a separate loan.
Limited Recourse Lending
The lender’s recourse is limited to the property itself, so the fund’s other assets sit outside the security. That protection is why lenders price these loans differently from an ordinary commercial loan.
Title Transfer
Once the borrowing is repaid, the fund can take legal ownership from the holding trust without breaching super law. The fund holds the beneficial interest throughout, so this step transfers title rather than value.
What Lenders Check on an SMSF Application
Lenders assess the fund as well as the property:
Fund Liquidity
Lenders want to see that the fund can meet repayments, outgoings and its own expenses without selling the property. The share of fund assets they expect to remain liquid after settlement varies between them.
Deposit Size
SMSF lending generally requires a larger deposit than a comparable commercial loan outside super, and the fund has to hold that money before it can act. Purchase costs, stamp duty and the trust set-up also come from fund assets.
Rent and Contributions
The lease rent plus member contributions have to cover the repayment, and lenders assess both at their own margins. Where the tenant is your own business, expect the lease and a market rent appraisal to be examined closely.
Fund Financials
Audited SMSF financial statements and fund bank statements are standard, commonly two years of each. A fund established recently has less to show, which narrows the lenders willing to look at it.
Trustee Structure
Most SMSF lenders will only lend where the fund has a corporate trustee, and some require a separate corporate trustee for the holding trust. Changing trustee structure mid-application costs time, so it is worth settling early.
How the Process Runs From First Call Onwards
Timing on an SMSF file is set by the fund’s own paperwork more than by the lender:
Checking Property Eligibility
We look at the property and the intended use against the business real property test before anything else, and refer the compliance question to your accountant or adviser. A property that fails this test cannot be financed under a new arrangement.
Confirming Fund Structure
We check the trustee arrangements, the deed and the holding trust against what lenders on the panel require. Where something needs changing, you hear about it before an application goes anywhere.
Comparing SMSF Lenders
Lender SMSF lending policies differ on liquidity, deposit and fund age. We bring back the ones your fund actually fits, with the rate, fees and conditions on each.
Submitting Supporting Documents
Fund financials, bank statements, the lease, the contract and the trust deeds all go in together. Missing documents are a common cause of delay.
Coordinating Settlement
We work alongside your solicitor and your accountant so the holding trust, the loan documents and the settlement date line up. The order these are executed in matters, which is why the legal work runs in parallel from the start.
Nothing here commits your fund to a lender, and no application is lodged until the structure is confirmed and you have chosen one.
What This Costs You
Broker commission is paid by the lender that funds the loan, usually as an upfront amount at settlement and a smaller ongoing amount while the loan runs. Any fee payable by you is set out in writing in our credit guide and credit proposal before you commit.
The costs specific to an SMSF purchase sit outside the loan. Establishing the holding trust, the legal work on the lease and the trust deeds, and your accountant’s or adviser’s fees are all paid by the fund, and they are payable whether or not the loan settles. Where an advertised rate appears on any product we show you, the comparison rate sits beside it.
Trade-Offs Worth Knowing Before You Commit
Buying commercial property inside super trades flexibility for structure:
Narrower Lender Panel
Fewer lenders write SMSF loans, and a policy change at one of them can remove your option overnight. Pricing is generally higher than the equivalent investment property loan broker arrangement held outside super.
Concentration Risk
Property is an illiquid asset inside a fund that has to pay pensions, insurance and expenses on time. A single large holding can leave the fund exposed if the tenant leaves.
Member Guarantees
Most SMSF lenders require personal guarantees from the members, so the limited recourse protection does not extend as far as it first appears. The terms differ between lenders and are worth comparing.
Improvement Restrictions
Borrowed money cannot be used to improve the asset under an LRBA, and changes significant enough to create a different asset can breach the arrangement. Repairs and maintenance are treated differently from improvements, and the line between them is not always obvious.
Why NSW Trustees Work With Us
DIY Lending operates as a Corporate Credit Representative of Finsure Finance & Insurance Pty Ltd, Australian Credit Licence 384704, and we are a member of the Mortgage and Finance Association of Australia. We are also a member of the Australian Financial Complaints Authority, which gives you an external body to escalate to if something goes wrong.
We hold access to more than 40 lenders and we are not owned by any of them, so the comparison starts with your fund’s position and not with a product we are required to place. Where a fund is not in a position to borrow yet, we say so on the first call.
We do not give advice on your fund, your contributions or your retirement strategy. That work stays with your accountant or licensed adviser, and we work alongside them.
Find Out If Your Purchase Still Qualifies
The rules changed on 10 August 2026, and the answer that applied to your fund before then may not apply now. Whether your property meets the business real property test and which lenders will look at a fund your size are both answerable before you spend anything on legal work. Talking to a broker early on an SMSF file costs less than unwinding a structure built in the wrong order.
Call 02 8806 7258 or send your details through, and you will get a clear read on whether the purchase can be financed and what your fund needs in place first. We work with trustees across NSW, including funds buying in Sydney while the members live elsewhere.
Frequently Asked Questions (FAQs)
Can my SMSF still borrow to buy a residential investment property?
Not under a new arrangement. The fund can still own residential property that it buys outright without borrowing.
Can my own business lease the property from my fund?
Yes, and this is the main reason owner-operators use the structure. The property also has to stay in wholly and exclusively business use for the life of the arrangement.
What happens to my existing SMSF loan?
It continues under the rules that applied when it started. The ATO has confirmed that maintaining or refinancing an LRBA entered into before 10 August 2026 does not trigger the new business real property test.
I exchanged contracts before 10 August 2026. Am I affected?
A binding contract exchanged before that date is protected, even where the loan is approved and the purchase settles afterwards. Significant later changes to the contract can put that protection at risk, so it is worth confirming the position before varying anything.
This page contains general information only. It is not financial product advice and does not take your objectives, financial situation or needs into account. Advice about a self-managed super fund, including whether borrowing inside super suits you, requires an Australian financial services licence, which DIY Lending does not hold. Superannuation rules, lender requirements and thresholds change, and the outcome for your fund depends on its circumstances and the lender assessing it. You may wish to speak with your accountant or a licensed financial adviser before acting on anything here.