Buying commercial property with your self-managed super fund (SMSF) may be worth considering, depending on your fund's balance, cash flow and investment strategy. However, changes introduced in 2026 have restricted SMSFs from using new limited recourse borrowing arrangements (LRBAs) to purchase residential property. SMSFs can still borrow to purchase eligible commercial property, while existing residential SMSF property loans may still be refinanced.
Commercial property can offer potential tax benefits, rental income and long-term growth, but SMSF property investment also comes with higher costs, strict compliance requirements and limited access to funds.
This guide explains what SMSF property loans can be used for following the 2026 changes, the pros and cons of buying commercial property through an SMSF and what to consider before investing.
Following the 2026 changes, SMSF borrowing can still be used to purchase eligible commercial property. Existing residential and commercial property loans held within an SMSF may also be refinanced, subject to lending criteria.
With Yard, an SMSF property loan can be used for:
Yard SMSF loans cannot be used to finance a new residential property purchase through an SMSF. SMSF property investment and borrowing are subject to superannuation rules, the fund's investment strategy and lending criteria. Independent financial, legal and tax advice should be considered before entering into an SMSF property transaction.
The potential benefits of buying commercial property through an SMSF include concessional tax rates, the ability to borrow for an eligible commercial property, diversification, greater control over investments and potential long-term growth.
Rental income earned by an SMSF is generally taxed at the concessional superannuation tax rate of 15% while the fund is in accumulation phase, subject to applicable rules. Capital gains on an eligible property may also receive concessional tax treatment depending on how long the asset is held and the fund's circumstances. Tax treatment can be complex, so seek independent tax advice about how the rules apply to your SMSF.
An SMSF may be able to use an SMSF property loan to finance part of an eligible commercial property purchase, with the remaining amount funded by the SMSF's existing capital. SMSF borrowing generally involves a limited recourse borrowing arrangement, or LRBA, and is subject to specific superannuation and lending requirements.
Borrowing can allow an SMSF to purchase a higher-value commercial asset than it could using available cash alone. However, the SMSF needs sufficient cash flow to meet loan repayments and other fund expenses. Read more about how super fund property investment works.
Adding commercial property to an SMSF can provide exposure to a different asset class alongside investments such as shares and cash. However, purchasing a large property can also create concentration risk if it represents a significant proportion of the SMSF's total assets.
An SMSF gives trustees greater control over investment decisions compared with many other superannuation structures. Trustees can select the commercial property and make decisions about its ongoing management, provided those decisions comply with superannuation law and the fund's investment strategy.
Commercial property may provide both rental income and the potential for capital growth over time. As with any investment, future growth is not guaranteed and property values can rise or fall.
Yes, an SMSF may be able to lease commercial property to a related business if the property qualifies as business real property and the arrangement complies with SMSF rules.
For example, a business owner may purchase eligible business premises through their SMSF and have their business lease the property from the fund. The arrangement must generally be conducted on commercial terms, including charging market rent under an appropriate lease.
Rental payments are made to the SMSF and can contribute to the fund's income and help meet property expenses and loan repayments. Related-party SMSF transactions are subject to strict requirements, so independent legal, financial and tax advice should be obtained before establishing this type of arrangement.
The main disadvantages of SMSF property investment include higher costs, complexity, limited liquidity, strict compliance requirements, property market risk and concentration risk.
There are costs associated with establishing and operating an SMSF, as well as costs specifically associated with purchasing property. These may include:
These costs can reduce the overall return from the investment and should be considered before purchasing.
Managing an SMSF involves ongoing trustee responsibilities. If the fund owns commercial property, trustees may also need to manage leases, property expenses, maintenance, insurance and other property-related obligations. Some of these functions can be outsourced, although this introduces additional costs.
Property is relatively illiquid compared with investments such as listed shares or cash. Selling commercial property can take time, so an SMSF that holds a large proportion of its assets in property needs to retain enough liquidity to meet expenses, loan repayments and other obligations.
SMSFs are subject to strict superannuation rules and ATO oversight. There are specific requirements governing SMSF property investment and borrowing. Following the 2026 changes, new SMSF borrowing for residential property purchases is restricted, while borrowing may still be available for eligible commercial property. SMSF trustees must also consider requirements including the sole purpose test, the fund's investment strategy, arm's-length dealings and rules applying to related parties. Failure to comply with SMSF rules can have significant consequences, so professional advice is important.
Commercial property values and rental income can change over time. Economic conditions, vacancies and changes in demand for particular types of commercial property can affect both the property's value and the income received by the SMSF. Borrowing can magnify the financial impact of these changes.
A commercial property can represent a significant proportion of an SMSF's assets. This can leave the fund heavily exposed to the performance of one property or property market. Trustees should consider diversification as part of the fund's overall investment strategy.
An SMSF commercial property loan allows an SMSF to borrow towards the purchase of eligible commercial property, subject to superannuation law and the lender's criteria.
SMSF property borrowing is generally structured through a limited recourse borrowing arrangement. Under this structure, the property is generally held in a separate holding trust while the loan is outstanding. The SMSF makes the loan repayments and receives eligible rental income associated with the property. The "limited recourse" structure generally limits the lender's recourse to the asset acquired under the arrangement if the SMSF defaults, subject to the loan and legal arrangements.
SMSF lending involves additional legal and trust structures, therefore it can be more complex than purchasing property personally or through a standard business structure.
The amount your SMSF needs depends on the commercial property's purchase price, how much the fund can borrow and the costs associated with the purchase.
Your SMSF will generally need enough available funds to cover:
The amount an SMSF can borrow will depend on factors including the property, fund position, rental income, contributions and the lender's credit criteria.
It is important not to assess affordability based on the deposit alone. The fund should retain sufficient liquidity after settlement to meet its ongoing obligations.
Yard offers SMSF property loans for eligible commercial property purchases and refinances, as well as refinancing for eligible existing residential properties already held within an SMSF.
If you're looking to purchase commercial property through your SMSF, the process generally involves:
Yard can also refinance eligible residential and commercial property loans already held within an SMSF.
A Yard Loan Consultant can review your existing loan and fund information and explain whether refinancing could provide a different rate, loan structure or features.
Depending on your circumstances, Yard SMSF loans can include:
All loans are subject to Yard's credit criteria. Learn more about SMSF property finance with Yard or use our SMSF loan repayment calculator to estimate your repayments.
Yard SMSF purchase loans are available for eligible commercial property, such as offices, retail premises and industrial property. Yard does not provide SMSF loans for new residential property purchases. Eligible existing residential SMSF property loans may still be refinanced.
No. You generally cannot use your SMSF to buy a residential property for you or your family to live in. SMSF property must be purchased and held for the purpose of providing retirement benefits, rather than for your personal use.
There are also strict rules around buying property from yourself or a related party. The property must meet the SMSF's investment rules and be purchased on an arm's-length basis.
However, you can use your SMSF to purchase an investment property that you can rent out to generate income. This income can then be used to pay off the loan and potentially grow your superannuation savings. If you are looking to buy a residential investment property outside your SMSF, you can explore Yard's investment property loans.
Yes. You can refinance an existing residential investment property held in your SMSF. The new lender pays out the existing loan at settlement, while the property generally remains in the fund's holding trust. Refinancing may help your fund secure a lower rate or access different loan features, such as an offset account.
If you are looking to refinance an existing residential SMSF loan, Yard can help. Yard specialises in SMSF lending and can refinance eligible residential and commercial SMSF loans, subject to credit criteria. A Yard Loan Consultant can review your current loan and explain the options available to your fund.
Yes, you can use your superannuation to buy a commercial investment property if it is held in a self-managed super fund (SMSF). With Yard, SMSF loans to purchase property are available for commercial property only, such as offices, retail spaces and warehouses. For residential property, Yard SMSF loans are available to refinance an existing SMSF loan. The property must pass the ATO's sole purpose test.
Not while the SMSF owns it. Once you retire and meet a condition of release, the fund may be able to transfer the property to you as a benefit payment. The property would then be owned by you personally, and you could live in it. Stamp duty and capital gains tax may apply to the transfer. Seek advice from a licensed financial adviser before planning this.
Yes, if the property qualifies as business real property. Your SMSF may lease a commercial property to your business at market rent under a written lease. Your business pays rent to the SMSF, which can help the fund repay its loan. Residential property cannot be leased to members or their related parties. Seek independent legal and tax advice before entering a related-party lease.
An SMSF may suit people who want more control over their super and have time to manage it. Higher running costs mean an SMSF typically suits larger fund balances. You can read Yard article on pros & cons of using SMSF to purchase property for a detail breakdown. You should also speak with a licensed financial adviser to assess if an SMSF suits your goals.
You typically need at least 20% of the purchase price as a deposit. The fund also needs money for stamp duty, legal fees and ongoing costs. The exact amount depends on the property price and loan amount. With Yard, SMSF loans for purchases are available for commercial property only.
Yes, you pay stamp duty on a property purchase through an SMSF. Just like any other property purchase, stamp duty is a government tax levied on the transfer of property ownership. This applies even if the property is purchased through an SMSF. Use our stamp duty calculator to estimate your stamp duty fee based on the purchase price of your investment property.
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