Buying property with a self-managed super fund (SMSF) is still possible in Australia, including purchasing eligible commercial property using an SMSF loan. However, legislation introduced in 2026 restricts new limited recourse borrowing arrangements (LRBAs) for residential property purchases, subject to transitional provisions. Existing residential SMSF loans may still be refinanced.
Buying property through an SMSF can provide greater control over your retirement investments, potential tax benefits and rental income. However, SMSF property investment also involves strict regulations, additional costs and borrowing requirements.
This guide explains how buying property with an SMSF works, the latest SMSF property rules, what types of property your fund can purchase, the benefits and risks of SMSF property investment and how to apply for an SMSF property loan.
Yes. You can still use an SMSF to buy eligible residential or commercial investment property in Australia, but the rules differ depending on the property type and whether you need to borrow. Following the 2026 changes, new SMSF borrowing is generally restricted to eligible commercial property.
The table below explains what is permitted when buying property through a self-managed super fund.
Yard offers SMSF property loans for eligible commercial property purchases and SMSF refinancing for existing residential and commercial property loans.
From 10 August 2026, SMSFs can no longer enter into new limited recourse borrowing arrangements to purchase residential property, subject to transitional provisions.
The changes were introduced through the Treasury Laws Amendment (Tax Reform No. 1) Act 2026, which received Royal Assent on 26 June 2026.
Under the revised SMSF property rules:
These changes affect SMSF borrowing for property, rather than prohibiting residential property ownership within an SMSF altogether.
If your SMSF already owns a residential investment property with an existing loan, you may be able to refinance your SMSF property loan with Yard.
A self-managed super fund (SMSF) is a private superannuation fund managed by its members for the purpose of providing retirement benefits. Unlike many retail or industry super funds, SMSF members generally make their own investment decisions and are responsible for managing the fund.
Self-managed super fund property investment allows eligible SMSFs to invest directly in residential or commercial property, although different rules apply depending on the property type and whether the fund uses borrowing.
An SMSF can also invest in other asset classes, including shares, cash and managed investments.
Most SMSFs have between one and six members, and members are generally also trustees or directors of the fund's corporate trustee.
While an SMSF offers greater investment control, trustees are responsible for complying with superannuation and tax laws, managing the fund's investments and meeting ongoing reporting obligations.
Setting up an SMSF to buy property involves establishing the fund, preparing an investment strategy and ensuring the funds meets the legal requirements for property investment.
If you're considering buying property through an SMSF, the process generally includes:
Following the 2026 legislative changes, new SMSF borrowing generally cannot be used to purchase residential property, subject to transitional provisions.
Establishing an SMSF solely to purchase property may not be appropriate for everyone. Consider seeking independent financial, legal and tax advice before proceeding.
SMSF borrowing for property generally involves a limited recourse borrowing arrangement (LRBA), which allows an eligible SMSF to borrow towards the purchase of qualifying property.
An LRBA is a borrowing structure that allows an SMSF to acquire an asset while generally limiting the lender's recourse to that asset if the loan defaults.
For a typical commercial SMSF property purchase, the process involves:
The SMSF remains responsible for managing the investment and meeting its loan obligations.
SMSF property finance is more complex than a standard investment property loan, so appropriate financial, legal and tax advice is important.
An SMSF can invest in eligible residential or commercial property, but following the 2026 changes, new SMSF property borrowing is generally restricted to eligible commercial property.
The rules depend on whether your fund is buying property using its own funds, borrowing to purchase property or refinancing an existing SMSF investment property.
Buying commercial property through an SMSF may allow the fund to earn rental income and potentially benefit from long-term capital growth.
An SMSF may be able to borrow to purchase eligible commercial property, including:
The property must meet the applicable business real property requirements, the SMSF's investment strategy and the lender's credit criteria.
Yard provides commercial SMSF property loans for eligible purchases, with loan amounts from $150,000 to $5 million and LVRs of up to 80%, subject to approval.
An SMSF investment property can still be residential, but following the 2026 changes, new SMSF borrowing generally cannot be used to finance residential property purchases.
An SMSF may still purchase eligible residential investment property using its own available funds without borrowing, provided the purchase complies with superannuation rules.
Residential property held within an SMSF also cannot be used as a home by members or their related parties.
Existing residential and commercial SMSF property loans may be eligible for refinancing.
Refinancing involves replacing the existing loan with another loan, potentially offering a different interest rate, repayment structure or loan features.
Yard offers SMSF loan refinancing for eligible existing residential and commercial investment property loans.
Yes. An SMSF may be able to lease commercial property to a business owned by a fund member or related party, provided the property qualifies as business real property and the arrangement meets SMSF rules.
For example, a business owner may use their SMSF to purchase eligible commercial premises and have their business lease the property from the fund.
The lease must generally be conducted on arm's-length terms, including charging market rent and maintaining appropriate documentation.
The business pays rent to the SMSF, providing income that may help meet the fund's loan repayments and property expenses.
This arrangement is subject to strict superannuation requirements. Independent legal and tax advice is recommended before proceeding.
The potential benefits of SMSF property investment include greater investment control, concessional tax treatment, rental income, diversification and potential long-term capital growth.
An SMSF gives trustees greater control over investment decisions, including selecting eligible property and managing the fund's investment strategy.
Income earned by a complying SMSF is generally taxed at 15% during accumulation phase, subject to applicable rules. Capital gains on eligible assets held for more than 12 months may receive a one-third CGT discount, resulting in an effective tax rate of up to 10% on the discounted gain in accumulation phase.
Different tax treatment may apply to assets supporting retirement-phase pensions, depending on the fund's circumstances and applicable rules. Tax outcomes are not guaranteed and should be assessed with a qualified tax adviser.
Commercial property may provide regular rental income to the SMSF. This income can contribute towards loan repayments, property expenses and the fund's retirement investment strategy. However, rental income is not guaranteed, and periods of vacancy may affect the fund's cash flow.
SMSF property investment may provide capital growth if the property increases in value over time. However, property values can also fall, so capital growth should not be assumed.
Property may provide exposure to an asset class that behaves differently from other investments held within an SMSF. However, diversification depends on the fund's overall portfolio. Investing a large proportion of an SMSF's assets in a single property can increase concentration risk.
The main risks of SMSF property investment include higher costs, limited liquidity, borrowing risks, concentration risk and strict compliance requirements. Find out whether buying commercial property with your SMSF is worth it.
Buying property in an SMSF may involve expenses such as:
These expenses can reduce the investment's overall return.
Property is generally less liquid than assets such as cash or listed shares.
Selling commercial property may take time, making it important for the SMSF to maintain enough available funds for ongoing expenses, repayments and other obligations.
Borrowing increases the SMSF's financial commitments.
Changes in interest rates, rental income or property expenses can affect the fund's ability to meet repayments.
A commercial property can represent a substantial proportion of an SMSF's total assets.
If the property declines in value or remains vacant, the fund's overall financial position may be affected.
SMSF trustees must comply with superannuation legislation, including rules relating to borrowing, investment strategies, related-party transactions and the sole purpose test.
Non-compliance can result in financial and tax consequences.
The amount an SMSF can borrow depends on the property value, the fund's financial position, available deposit, income and the lender's credit criteria.
Lenders generally assess:
Yard offers eligible commercial SMSF property loans from $150,000 to $5 million, with LVRs of up to 80%.
For example, an 80% LVR on an eligible $1 million commercial property would represent an $800,000 loan and a $200,000 deposit, excluding stamp duty, legal fees and other costs.
The maximum available LVR and loan amount depend on the property and Yard's lending criteria.
Yard offers specialist SMSF property finance for eligible commercial property purchases and refinancing existing residential and commercial SMSF loans.
Depending on the loan and eligibility, features include:
Visit Yard's SMSF loan product page for current features and rates.
SMSF lenders generally require documents confirming the fund's structure, financial position, available deposit and ability to service the loan.
Depending on the application, Yard may request:
Documentation requirements depend on the SMSF structure and circumstances.
A Yard Loan Consultant can explain which documents your application needs and talk you through your SMSF loan options.
To apply for an SMSF property loan, you'll generally need to confirm your fund's borrowing capacity, prepare the required documents and submit an application for lender assessment.
Start by reviewing your SMSF's available funds, income, existing commitments and potential borrowing capacity. For a commercial property purchase, conditional approval may help establish how much your SMSF could borrow before you commit to a property.
Gather the relevant SMSF trust documents, financial records, property details and other information requested by the lender.
Your lender will assess the SMSF, proposed property, borrowing structure and ability to meet repayments. If approved, the lender will arrange loan documentation and settlement.
Yard provides a dedicated Loan Consultant to assist with the application and settlement process. You can apply for an SMSF loan or speak with a Yard SMSF lending specialist, who can talk you through your options.
Yard specialises in SMSF lending. We offer loans for buying eligible commercial property and for refinancing existing residential and commercial SMSF loans.
A Yard Loan Consultant can help you:
Explore our SMSF property loans, learn about SMSF refinancing or estimate your repayments with our SMSF loan repayment calculator.
All loans are subject to credit criteria, terms, conditions, fees and charges. This article provides general information only and does not constitute personal financial, legal or tax advice.
Yes. An SMSF can borrow to purchase eligible commercial property through a compliant limited recourse borrowing arrangement. The property must meet applicable business real property requirements and the lender's credit criteria.
Generally, no. From 10 August 2026, new SMSF limited recourse borrowing arrangements cannot be used to purchase residential property, subject to transitional provisions. SMSFs may still purchase eligible residential investment property without borrowing and refinance qualifying existing residential SMSF loans.
No. You and your related parties generally cannot live in residential property owned by your SMSF. SMSF assets must be maintained for the purpose of providing retirement benefits.
Interest and certain expenses relating to an income-producing SMSF property may be deductible to the fund, subject to applicable tax rules. The tax treatment depends on the SMSF's circumstances and should be confirmed with a qualified tax adviser.
Yes. Yard's SMSF loans allow additional repayments, subject to the applicable loan terms. Making additional repayments may help reduce the outstanding loan balance and total interest paid.
Yes. Qualifying existing residential SMSF borrowing arrangements may still be refinanced following the 2026 legislative changes. Yard offers refinancing for eligible residential and commercial SMSF property loans, subject to credit criteria.
Yes, provided the property qualifies as business real property and the transaction complies with SMSF rules. Your business may also be able to lease the property from your SMSF on commercial, arm's-length terms.
Yes. You can use a self-managed super fund to purchase eligible investment property, provided the investment complies with superannuation rules. Following the 2026 changes, new SMSF borrowing is generally restricted to eligible commercial property, while residential investment property may still be purchased without borrowing.
Some SMSF loans offer offset facilities. Yard provides an optional 100% offset facility, allowing eligible SMSF funds held in the linked account to reduce the loan balance used to calculate interest.
SMSF loan repayments depend on the loan amount, interest rate, loan term and repayment structure. Use Yard's SMSF loan repayment calculator to estimate repayments and total interest costs.
The required deposit depends on the property, lender and maximum LVR. Yard offers commercial SMSF loans with LVRs up to 80%, meaning an eligible purchase may be possible with a 20% deposit. Your SMSF will also need funds for purchase costs and ongoing expenses.
Buying property through an SMSF may offer rental income, potential capital growth and concessional tax treatment. However, the suitability of SMSF property investment depends on the fund's balance, investment strategy, borrowing costs, liquidity and risk tolerance. You can read Yard's article on Is buying commercial property with your SMSF worth it?
Possibly, but only in limited cases. What matters is how the property is used, not whether it is zoned or built as residential. To qualify, the property must be used wholly and exclusively in one or more businesses. This means 100% business use, with no residential or private use. The business doesn’t have to be run by the SMSF or its members.
The test is strict. Even minor non-business use can disqualify a property. Mixed-use properties, such as a shop with an apartment above or a commercial property with a caretaker’s residence, generally won’t qualify. Short-stay accommodation, such as Airbnbs and holiday lets, is also generally treated as residential use.
Residential property may qualify where it is:
These cases are highly technical, so get independent SMSF or legal advice before proceeding.
Business real property is land and buildings used wholly and exclusively in one or more businesses. It includes freehold and leasehold interests, and the business doesn’t have to be run by the SMSF or its members. Offices, shops, warehouses, factories and working farms generally qualify. Following the 2026 changes, business real property is the main type of property an SMSF can borrow to buy through a limited recourse borrowing arrangement (LRBA).
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