Written and reviewed by John Pierre Saliba, Director and Senior Finance Broker, MFAA Accredited, ACL 511092. Last reviewed 8 October 2026.
Can My SMSF Still Get a Property Loan in 2026?
Yes, for commercial property, and that answer now needs the context most pages have not caught up with: since 10 August 2026, self-managed super funds can no longer take out new loans to buy residential property. Limited recourse borrowing remains fully available for business real property, offices, warehouses, retail premises, medical suites and similar, typically at 60-80% LVR, and existing residential SMSF loans are protected and can still be refinanced.
The Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 received Royal Assent on 26 June 2026 and banned new residential SMSF borrowing from 10 August 2026. Existing loans are grandfathered, refinancing rights are preserved, and commercial borrowing continues. We published a full plain-English breakdown of what passed, who is protected and what to do: read the SMSF residential borrowing ban explained.
| Key facts | Position in October 2026 |
|---|---|
| New residential SMSF loans | Banned since 10 August 2026, no new residential LRBAs |
| Existing residential SMSF loans | Grandfathered; the right to maintain or refinance is preserved in the legislation |
| Commercial / business real property | LRBAs still available, typically 60-80% LVR, subject to assessment |
| Liquidity requirement | Often 10-20% of fund assets in liquid form after settlement |
| Fund balance lenders look for | Often around $200,000-$250,000, with some lender flexibility |
| Interest rates | Higher than standard home loans; SMSF and commercial pricing applies |
| Timeline | Typically 4-8 weeks including bare trust setup |
Typical ranges across our lender panel; policies vary by lender and fund. Every application is subject to lender assessment.
What Is an SMSF Loan (LRBA) and How Does It Work in 2026?
An SMSF property loan is a limited recourse borrowing arrangement, an LRBA: the only structure under which a super fund may borrow to buy property. The property is held in a separate bare trust (also called a holding trust) on behalf of the fund, and if the loan ever defaults, the lender's recourse is limited to that single property. Your fund's other assets, and your personal assets, are shielded.
That limited recourse is exactly why SMSF lending has its own rules of thumb: lenders price for the thinner security, cap LVRs lower than home loans, and look hard at the fund's cash flow. Each LRBA covers a single acquirable asset, so one property means one bare trust and one loan. The structure must be in place correctly before contracts are signed; unwinding a mis-structured SMSF purchase is expensive.
What Changed for SMSF Property Loans on 10 August 2026?
In short: the borrowing door closed for residential property and stayed open for business real property. The amendment added a condition to section 67A of the Superannuation Industry (Supervision) Act 1993 that where an LRBA asset is real property, it must be business real property as defined in section 66, property used wholly and exclusively in one or more businesses. Houses, apartments and units do not meet that definition, so new residential LRBAs ended on 10 August 2026.
The protections matter as much as the ban:
- Existing loans are grandfathered. If your fund's loan was in place before 10 August 2026, nothing changes.
- Refinancing rights are preserved. The legislation specifically allows a pre-ban borrowing to be maintained or refinanced.
- Contract date is the trigger. Contracts exchanged before 10 August 2026 are protected even where settlement happened afterwards.
- Cash purchases continue. An SMSF can still buy residential property outright with fund money, if the investment strategy supports it.
- The test is business real property, not "commercial". Mixed-use premises and vacant land can fail the section 66 test, so have the specific property assessed before signing.
For the legislative timeline, the voting record and the full what-is-banned table, see our dedicated guide to the 10 August 2026 SMSF residential borrowing ban.
Can I Refinance My Existing SMSF Loan After the Ban?
Yes, and for many trustees this is the single most useful fact on this page. Pre-ban residential SMSF loans are often sitting on rates well above what the same fund could achieve today, and a number of lenders continue to accept refinances of grandfathered loans, subject to assessment.
The rules of the road: keep the refinance like-for-like, same property, and a new loan that replaces the old borrowing rather than enlarging it. Top-ups, equity release or switching the security asset are material changes that risk the arrangement being treated as new, which the law no longer permits for residential property. Done cleanly, a refinance preserves grandfathered status while cutting the fund's biggest expense. With new residential volume gone, lenders are competing for the existing book, which is leverage we are happy to use on your behalf.
Since August I have reviewed a steady stream of pre-ban SMSF loans, and most were set and forgotten years ago. If your SMSF loan rate starts with a 7 or an 8, it deserves a review. The refinance right is written into the legislation, the process is a straight like-for-like switch, and the saving lands inside your super where it compounds for retirement. Fifteen minutes with your current statement is all I need to tell you if it is worth moving.
What Are Typical SMSF Commercial Loan Terms in 2026?
For business real property, expect LVRs of typically 60-80%, rates above standard home loan pricing, and close attention to the fund's liquidity. The common policy themes across our panel:
- LVR: typically 60-80% depending on lender, property type and lease profile
- Liquidity: many lenders want roughly 10-20% of the fund's assets held in liquid form after settlement
- Fund balance: expectations often sit around $200,000-$250,000, with flexibility where contributions are strong
- Servicing: rental income from the property plus demonstrated, sustainable member contributions
- Terms: loan terms up to 15-30 years depending on lender, principal and interest or interest-only periods by negotiation
The classic use case is business owners buying their own premises through their fund, warehouse, clinic, office or shop, and paying market rent to their own super instead of a landlord. Our commercial loans page covers the non-SMSF side of the same purchase.
How Does the SMSF Loan Process Work?
Expect 4-8 weeks end to end, longer if the fund is being established at the same time. The sequence that works:
- Advice first: your financial adviser confirms the strategy suits the fund; your accountant confirms the structure. We stay in our lane: lending.
- Fund documents: trust deed permitting borrowing, an investment strategy that contemplates the purchase, and the fund's financials.
- Pre-approval: we match the fund to lenders whose policy fits its balance, liquidity and contribution pattern.
- Bare trust setup: established correctly, and in the right sequence relative to contracts, before exchange.
- Approval and settlement: valuation, formal approval, then settlement with the property held in the bare trust for the fund.
Worked Example: SMSF Buying a $900,000 Commercial Premises
A couple running a physiotherapy practice want their fund to buy the $900,000 suite they currently rent. At 70% LVR, here is roughly how it stacks up:
- Purchase price: $900,000
- Loan at 70% LVR: $630,000
- Fund equity required: $270,000 deposit plus roughly $40,000 in stamp duty and costs, about $310,000 from the fund
- Repayment at an illustrative 7.00% p.a. over 25 years: roughly $4,450 per month principal and interest
- Servicing: market rent paid by the practice to the fund, plus the couple's ongoing concessional contributions
- Liquidity buffer: on top of the $310,000, the lender wants the fund to retain a liquid buffer after settlement, on policies of 10-20% that could mean roughly $100,000-$180,000 depending on the lender and total fund assets
Figures are illustrative only, use round numbers and an illustrative rate, and do not account for your fund's circumstances. Lending criteria, fees and charges apply. Rental figures must be set at market rates on commercial terms.
What Are the Compliance Rules for SMSF Property in 2026?
The lending is the easy half; the compliance wrapper is where trustees get hurt. The core rules:
- Sole purpose test: the property must be held to provide retirement benefits, not lifestyle benefits along the way.
- Residential and related parties: a fund-owned residential property can never be lived in or rented by a member or related party, no exceptions, including holiday use.
- Business real property exception: commercial premises can be leased to a member's business, at market rent, on arm's-length documented terms, which is what makes the own-your-premises strategy work.
- One asset per LRBA: each borrowing covers a single acquirable asset in its own bare trust.
To be clear about our role: Lend & Loan provides credit assistance under ACL 511092. We do not provide financial, tax or legal advice, and whether an SMSF property strategy suits you is a question for your licensed financial adviser and accountant. Once that decision is made, we arrange the lending across 50+ lenders. Start with our SMSF property loan guide 2026 or the SMSF hub for the wider picture, and use the borrowing power calculator for your personal (non-SMSF) capacity.
What Should SMSF Trustees Do Next in October 2026?
Two months into the new regime, the practical to-do list is short. If your fund holds a pre-ban residential loan, have the rate reviewed; the refinance right is preserved and the market for grandfathered loans is competitive. If you run a business from rented premises, ask your adviser whether owning them through your fund stacks up, because that pathway is untouched. And if anyone pitches you a scheme to get new residential borrowing into your fund, walk away; the law is explicit, and the compliance risk sits with you as trustee.
Book a free 15-minute call with John Pierre Saliba
Whether it is a commercial purchase inside your fund or a review of a grandfathered pre-ban loan, fifteen minutes is enough to map your options across 50+ lenders. Free, no obligation. Bring your adviser into the call if you like.
