SMSF Property Rules Have Changed

2 min read

Sep 16, 2026, 3:55:31 PM

SMSF Property Rules Have Changed. But Is Commercial Property Still an Option?

If you’re a business owner with a Self-Managed Super Fund (SMSF), you may have heard about the recent changes to borrowing for property.

From 10 August 2026, the rules around Limited Recourse Borrowing Arrangements (LRBAs) changed. For new arrangements involving real property, the property must now qualify as business real property.

In simple terms, the ability for an SMSF to take out a new LRBA to purchase residential investment property has been restricted.

But for business owners, there’s another part of the story worth understanding.

Commercial and business property may still be an option.

So, What Actually Changed?

The changes were introduced through the Treasury Laws Amendment (Tax Reform No. 1) Act 2026.

Under the new rules, real property purchased through a new SMSF borrowing arrangement must meet the definition of business real property.

The changes apply to new arrangements from 10 August 2026. There are also transitional provisions covering certain arrangements already in place before the changes, including refinancing existing borrowings in particular circumstances.

That distinction is important because the changes don't mean SMSFs have suddenly lost the ability to borrow for all property.

They have changed what type of property can be purchased using new SMSF borrowing arrangements.

What About Commercial Property?

This is where things get particularly relevant for self-employed Australians and small business owners.

Business real property is generally property used wholly and exclusively in one or more businesses.

Depending on the circumstances, that could include premises such as an office, warehouse, factory, workshop or shopfront.

So while the residential borrowing landscape has changed, there may still be an opportunity for an SMSF to borrow to purchase qualifying commercial or business premises.

For some business owners, that could even include premises used by their own business, provided the arrangement satisfies the relevant superannuation rules, including requirements around business real property and dealings being conducted on appropriate commercial terms.

Why Business Owners May Want to Understand This

For many self-employed Australians, property and business are closely connected.

You may already be paying rent for a workshop, office, warehouse or commercial premises. Or perhaps owning your business premises has been part of your longer-term plan.

The recent SMSF changes don't necessarily remove that conversation.

They simply make it important to understand the distinction between residential property and qualifying business real property.

SMSF borrowing is also a specialised area. The property, SMSF structure, borrowing arrangement and compliance requirements all need to work together.

This is why it’s important to seek appropriate independent financial, legal and tax advice before making decisions involving your SMSF.

The Rules Changed. The Conversation Didn't End.

Headlines about changes to SMSF property borrowing can make it sound like property is completely off the table.

That's not quite the case.

For business owners considering commercial premises, there may still be finance pathways worth understanding.

At Rate Money Southern Highlands, our team can help you understand the finance options that may be available for eligible SMSF commercial property purchases and work alongside your accountant and other professional advisers where appropriate.

Because when the rules change, understanding what is still possible can be just as important as knowing what isn't.

Want to understand more about SMSF property finance?

Talk to the team at Rate Money [BRANCH] about the finance options that may be available for your circumstances.