Using a Self-Managed Super Fund (SMSF) to invest in property can be complex, particularly following the 2026 changes to SMSF borrowing rules.
From 10 August 2026, new Limited Recourse Borrowing Arrangements (LRBAs) for residential property are no longer available. Qualifying existing arrangements and property contracts entered into before the commencement date are protected under the transitional rules. SMSFs can continue to use qualifying LRBAs to acquire business real property, subject to superannuation and lending requirements.
What If We Finance can help you understand your lending options and work alongside your accountant, solicitor and financial adviser where required.
What If We Finance can help compare available SMSF lending options and assess whether a proposed structure is viable.
The 2026 legislation changed the rules governing LRBAs for real property.
New LRBAs for standard residential investment property are now prohibited. SMSFs can continue to use qualifying LRBAs to acquire business real property, subject to superannuation and lending requirements.
The change does not require existing SMSF residential properties to be sold simply because the new borrowing rules have commenced. The legislation protects qualifying arrangements entered into before 10 August 2026, including certain property acquisitions covered by the transitional rules. Refinancing of a borrowing covered by the transitional rules is also covered by the transitional provisions.
If you are reviewing an existing SMSF loan or a property transaction covered by the transitional rules, the dates and structure of the arrangement matter.
Speak to us before making changes to an existing SMSF borrowing arrangement.
The major ongoing opportunity is borrowing to acquire qualifying business real property through an LRBA.
| Property use | SMSF borrowing position |
|---|---|
| New standard residential investment property | New LRBA not available since 10 August 2026 |
| Existing qualifying residential LRBA | Protected under transitional rules |
| Business real property | LRBA can remain available, subject to SMSF and lender rules |
| Residential property purchased with SMSF cash | Not an LRBA transaction |
Business real property generally refers to property used wholly and exclusively in one or more businesses. A common example is a business owner using an SMSF to acquire premises and lease them to their trading business at market rent.
The arrangement must still satisfy SMSF rules, including requirements around related-party transactions, investment strategy and market value.
Yes, qualifying business real property can remain an SMSF borrowing strategy after the 2026 changes.
For example, an SMSF may acquire suitable commercial premises and lease them to the member’s business, provided the arrangement satisfies the relevant superannuation rules.
The property must be suitable for the strategy, the transaction must be conducted on appropriate commercial terms, and rent should generally be at market value.
Your accountant, financial adviser and solicitor should be involved in assessing the structure before you proceed.
An SMSF LRBA uses a structure that is different from an ordinary home loan.
A bare trust is a separate trust established to hold the asset acquired under the LRBA. The SMSF has the beneficial interest in the asset, while the bare trustee holds legal title during the borrowing arrangement.
An LRBA is also subject to the single acquirable asset requirement and other conditions. Getting the structure wrong can create significant compliance issues.
SMSF lenders may consider factors including:
Deposit requirements vary between lenders and property types, so there is no universal SMSF borrowing percentage.
SMSF property borrowing has more moving parts than a standard investment loan. Common issues include:
The 2026 residential borrowing changes make timing and documentation particularly important when reviewing existing or transitional arrangements.
An SMSF mortgage broker can help you understand the lending side of a transaction and compare available lender requirements.
At What If We Finance, we can work with your accountant, solicitor and financial adviser where required, rather than treating the loan application in isolation.
We can help you assess:
Our role is to give you a clear view of whether the proposed finance structure is workable before you commit to the transaction.
Call 03 8804 1354 | Book a free 30-min call
What If We Finance has more than 25 years of banking, finance and mortgage broking experience and holds its own Australian Credit Licence (389609).
We take a straight-talking approach to complex lending and work with the professionals involved in your broader financial strategy.
Our team has also been recognised with the MFAA Victoria Customer Service Award, winning in 2024 and being named a finalist in 2025 and 2026.
Book a call to discuss your SMSF lending requirements.
Not through a new LRBA. The new rules prohibit SMSFs from establishing LRBAs to acquire standard residential investment property. Qualifying existing arrangements and certain property contracts entered into before 10 August 2026 are protected under the transitional rules.
No. The legislation does not require qualifying existing residential SMSF properties to be sold simply because the new borrowing rules have commenced. The treatment of an existing arrangement depends on its structure and when the relevant arrangement was entered into.
An SMSF can continue to use an LRBA to acquire qualifying business real property, subject to the applicable superannuation rules, lender requirements and the structure of the transaction.
Potentially. Business real property can be leased to a related business where the arrangement complies with SMSF rules and is conducted on appropriate commercial terms, including market rent.
A bare trust is a separate trust used to hold an asset acquired under an SMSF LRBA. The SMSF has the beneficial interest in the asset while the trustee holds legal title during the borrowing arrangement.
There is no single deposit requirement for every SMSF loan. Lender requirements can vary according to the property, loan structure, LVR and the fund’s financial position.
Refinancing of a borrowing covered by the transitional provisions may remain available, subject to the requirements of the legislation and the new arrangement. Your specific documents and dates should be reviewed before refinancing.
Ideally, before signing a property contract or making changes to an existing SMSF borrowing arrangement. Early advice allows the lending, trust and professional requirements to be considered together.
There is no single best home loan or best lender. The right structure depends on your circumstances, including your income, deposit, cash flow and future
Melbourne’s property market has become more balanced in 2026. After a period of stronger growth, recent data shows some moderation in prices, which means buyers
Key Takeaways Most lenders want a 20% deposit to avoid Lenders Mortgage Insurance (LMI). Eligible first home buyers can get in with just 5% through
Inflation is not falling as quickly as the Reserve Bank of Australia would like. Annual inflation is currently at 4%, while core inflation has climbed to
Australia’s latest inflation figures have eased, but the interest rate conversation is far from settled. Each new data release sparks fresh predictions and market swings,
The outlook for 2026 interest rates has shifted following higher-than-expected inflation data. Annual inflation reached 3.8 percent, mainly due to rising electricity and food costs. Underlying
SMSF property lending requires careful consideration of the fund structure, property, borrowing arrangement and applicable rules.
The 2026 changes make it particularly important to understand whether you are dealing with a new business property LRBA, an existing residential arrangement or a transaction covered by the transitional rules.
Call What If We Finance on 03 8804 1354 or book a call to discuss your SMSF lending options.
Call Now
