SMSF Commercial Property Loans (LRBA) for Australian Businesses
Use your SMSF to buy a commercial property — including the premises your business operates from. Structured through a Limited Recourse Borrowing Arrangement with specialist SMSF commercial lenders.
Subject to lender assessment and approval. ACL 384704.
SMSF Commercial — Quick Guide
- Structure — Limited Recourse Borrowing Arrangement (LRBA)
- LVR — typically 60–70% in SMSF
- Eligible assets — commercial property only (single acquirable asset)
- Business premises — allowed — must be at arm’s length market rent
- Bare trust — separate bare trust holds the property until loan repaid
- Advisers — accountant + financial planner + commercial broker
How SMSF Commercial Property Works
The mechanics of buying commercial property inside super.
Limited Recourse Loan
Lender’s recourse is limited to the specific property only.
- Other SMSF assets protected
- Higher rate vs non-SMSF commercial
- Specialist SMSF lenders only
Bare Trust Structure
Property held in a separate "holding" / bare trust.
- Required by SIS Act for LRBAs
- Title transfers to SMSF when loan paid off
- Setup fees apply — accountant guides this
Business Real Property
Your SMSF can own the premises your business uses.
- Lease must be at market rent
- All dealings at arm’s length
- Treated as "business real property" under SIS
Rent Funds the Loan
Tenant pays rent into the SMSF, SMSF services the loan.
- Predictable contribution-free cash flow
- Concessional tax treatment in super
- Capital gains taxed at SMSF rates
SMSF vs Direct Commercial Property
Inside SMSF (LRBA)
- Tax effective long-term hold
- LVR around 60–70% — limited recourse
- Setup more complex (bare trust, advice)
- Cannot improve / develop while debt remains
- Income and gains taxed at super rates
Direct (Personal / Company / Trust)
- LVR up to 75–80% available
- Simpler structure
- No LRBA / bare trust required
- Free to develop, subdivide, etc.
- Higher tax on income and gains
SMSF Commercial Setup Checklist
- Confirm SMSF investment strategy supports the purchase
- Engage accountant and financial planner — SMSF advice is regulated
- Set up bare trust / holding trust to hold property
- Source SMSF-eligible commercial lender (specialist panel only)
- Lease must be on commercial market terms if business will occupy
- Stamp duty and setup costs paid from SMSF funds
Frequently Asked Questions
Can my SMSF buy the property my business operates from?
Yes. Commercial property used by a related party (your business) is treated as "business real property" under the SIS Act and is allowed inside an SMSF. The lease must be at arm’s length market rent and all dealings genuinely commercial.
How much deposit do I need for an SMSF commercial property loan?
Plan for 30–40% deposit. SMSF commercial LRBAs typically max out around 60–70% LVR with specialist lenders. The SMSF must hold the deposit, settlement costs and an appropriate liquidity buffer.
Can I improve or extend the property after purchase?
While the LRBA is in place, the SIS Act restricts improvements that change the character of the asset. Repairs and maintenance are fine; large-scale improvements that fundamentally change the asset can breach the rules. Get specific SMSF advice before any work.
Do I need a financial planner to do this?
Yes. SMSFs are regulated and the establishment / strategy advice must come from an appropriately licensed adviser. We work alongside your accountant and planner — Freedom Financing arranges the commercial loan, not the SMSF advice itself.
Related Commercial Property Pages
Looking at SMSF commercial property?
Speak with Jorden about how to structure an SMSF commercial property loan alongside your accountant and financial planner.