SMSF Loans in Sydney
An SMSF loan lets your self-managed super fund borrow to buy a residential or commercial property, using a limited recourse borrowing arrangement (LRBA). Fewer lenders offer SMSF loans and their rules are stricter, so we find lenders that suit your fund and work alongside your financial adviser, accountant and solicitor.
Reviewed by Vikas Gupta, MFAA member · Updated
How an SMSF loan works
A bare trust holds the property
The fund sets up a bare (holding) trust to hold the property until the loan is repaid.
Limited recourse
The lender's recourse is limited to that property only, protecting the fund's other assets.
The fund makes repayments
Repayments come from the fund — rent, contributions and other fund income.
Sole purpose test
The property is for retirement benefits, not personal use. Residential property can't be lived in or rented by members or related parties.
What lenders typically look for
Deposit
Generally 20–30% of the price, plus costs, held in the fund.
Liquidity
A cash buffer left in the fund after settlement (often around 10% of the fund's balance).
Fund income
Enough contributions and rent to cover repayments.
Documents
Trust deed, bare trust deed, fund financials and tax returns, member statements, corporate trustee details.
Property
One single asset per LRBA; no major improvements while borrowed against.
Residential vs commercial in an SMSF
| Item | Residential | Commercial |
|---|---|---|
| Can members use it? | No — not related parties either | Your business can lease it at market rent |
| Typical maximum lending | Lower than standard home loans | Often lower again |
| Common use | Long-term growth asset | Business owners buying their premises |
SMSF loan questions
Can my business rent the commercial property my SMSF buys?
Generally yes, on a formal lease at market rent. Your adviser will confirm the rules. Commercial finance →
Can I renovate an SMSF property?
You can repair and maintain it with borrowed funds, but you generally can't improve it until the loan is paid off.
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Book a free chatGeneral information only. Not financial product, superannuation or tax advice. Lending criteria, fees and charges apply.
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