An SMSF can invest in property if it is for retirement purposes, no member or relative benefits from it now, and the fund can afford it. Since 10 August 2026 the fund can no longer borrow to buy residential property, so residential purchases are cash purchases. Borrowing remains available for business real property.
Current as at September 2026.
Quick answer: a self-managed super fund can invest in property, residential or commercial, as long as it’s for retirement purposes, no member or relative gets a present-day benefit from it (business premises leased to a member’s business at arm’s length is the exception), and the fund can afford it. Since 10 August 2026 the fund can no longer borrow to buy residential property, so residential purchases are cash purchases now. Borrowing is still available for business real property. Existing SMSF loans continue and can be refinanced.
This guide covers the whole picture as it stands in September 2026: who does this, what the rules are, what changed, what it costs, how the lending works where it’s still available, and the questions to put to your adviser before you go near it. It’s long because the topic is, so skip to the part you need.
Who has an SMSF and what’s in them
The ATO‘s March 2026 quarterly report counts 672,805 SMSFs with 1,239,977 members and $1.06 trillion in assets. By value the biggest holdings are listed shares (26%) and cash and term deposits (16%). Eighty-five percent of members are 45 or older.
So the typical SMSF member is over 45 and the typical fund holds a spread of shares and cash that looks a lot like a managed fund, except they run it, and property is a minority position across the sector, which is worth knowing before you assume everyone’s doing it because a lot of the marketing around SMSF property suggests they are.
What an SMSF can and can’t do with property
The rules come from the ATO and they’re not negotiable.
The sole purpose test. The fund exists to provide retirement benefits to members, or death benefits to dependants. Every investment has to be made and kept for that purpose. A property bought to give a member a benefit before retirement doesn’t meet it.
No use by members or relatives. A residential property leased to anyone connected to the fund is an in-house asset, and a house will exceed the 5% cap in almost any fund, so in practice nobody connected to the fund can live in, holiday in or rent it. This is the rule that ends most “can my super buy me a house” conversations.
In-house assets capped at 5%. Loans to, investments in, or assets leased to related parties can’t exceed 5% of the fund’s assets by market value. Business real property leased to a related business is excluded from the cap, subject to the conditions. A house leased to a relative would in almost any fund exceed that.
No buying from related parties, except business real property. A fund generally can’t acquire assets from members or their relatives. Business real property, meaning real property used wholly and exclusively in one or more businesses, is the exception. A fund can buy the premises a member’s business operates from and lease them back to the business at market rent.
An investment strategy. Written, covering diversification, liquidity and the fund’s ability to pay benefits, and the property has to fit it.
Borrowing only through an LRBA. A limited recourse borrowing arrangement: the fund borrows to buy a single asset, the asset sits in a separate holding trust, and the lender’s recourse is limited to that asset.
What changed on 10 August 2026
The Treasury Laws Amendment (Tax Reform No. 1) Act 2026 received Royal Assent on 26 June 2026. From 10 August, an LRBA entered into on or after that date can only be used to acquire real property if it is business real property.
In practice: no new SMSF borrowing to buy a house, unit, townhouse or holiday property. The ATO lists what’s unaffected: existing LRBAs entered before 10 August, refinancing of those existing LRBAs, and binding contracts exchanged before 10 August even if settlement or the loan happens later. Business real property borrowing continues under the rules that applied before.
Our own posts on 4 and 11 August covered the run-up, when brokers reported a spike in clients trying to exchange before the deadline. That window has closed. If you didn’t exchange before 10 August, residential borrowing inside super isn’t available to you.
Which strategies remain?
Residential property, paid for in cash. The fund can still buy a house as an investment if it can pay for it without borrowing, keep a liquidity buffer, and stay diversified enough to satisfy its own investment strategy. For most funds that means a large share of the fund in one asset, which is the concentration risk your adviser will raise.
Business real property, with or without borrowing. The fund buys commercial premises, commonly the ones a member’s business operates from, and can borrow to do it. Rent from the business goes into super. The lending is available, the related party exception applies, and it’s where most of our SMSF lending now sits. The compliance side (market rent, lease terms, sole purpose) needs your accountant and adviser.
Holding or refinancing an existing residential LRBA. If the fund already owns residential property under a loan written before 10 August, it continues. The loan can be refinanced. A lot of these loans were written years ago and never reviewed, and the refinance door is explicitly open.
What it costs
Book a time with a Loan Lounge broker — no cost, no obligation.
Moneysmart‘s warning is that SMSFs can be expensive to set up and run, and in some cases cost more than retail and industry funds. Property adds to that.
Fund setup and annual running: trust deed, ASIC registration if there’s a corporate trustee, annual audit, annual return, accounting. Ongoing regardless of what the fund owns.
Property-specific: a holding trust deed for any LRBA (one SMSF document provider quotes $880 to $1,495 for bare trust establishment), valuation, legal and conveyancing, stamp duty, and the audit now covering the property and, if there’s a loan, the loan.
The loan itself: SMSF loans cost more than standard investment loans. The structure is more work for the lender and its recourse is limited, so the rate and the fees are higher. Our SMSF loan costs page goes through the components.
How the lending works, where it’s still available
For a business real property purchase, or a refinance of an existing residential LRBA, the lender assesses the fund, and commonly asks members to guarantee the loan.
Fund balance. Lenders set minimums. Lender requirements differ by fund, and we compare the published SMSF products in Which lenders offer SMSF loans. Other lenders differ.
Liquidity after settlement. The fund needs cash left over. How much is lender policy, and some lenders re-test it during the loan.
Loan size and LVR. Minimum and maximum loan sizes vary by lender, and SMSF loans are written at a lower LVR than a standard home loan. The published figures, lender by lender, are set out in our SMSF lender comparison.
Servicing. Contributions plus rent have to cover repayments with a margin. Lenders look at the members’ contribution history and the lease.
Documents. Fund deed, holding trust deed, investment strategy, fund financials and returns, the contract, the lease if there is one.
The lenders publishing SMSF products are largely non-bank and specialist lenders. In our experience the big four are not the main players here. NAB’s super lending product, for instance, is a margin loan for shares and managed funds, not property. Which lender fits a given fund is an assessment, and we name lenders here as ones that publish products, not as recommendations.
What should you ask your adviser?
- Does the fund’s investment strategy actually support this, or would we be rewriting it to fit?
- What does the fund look like if this property is vacant for six months?
- How does the fund pay a pension when most of it is one building?
- If it’s business real property, is the rent at market and can the business afford it through a bad year?
- What’s the exit? Who buys this from the fund, and when?
- What does this cost the fund every year, all in, and what return does it need to justify that?
We’re brokers. We don’t advise on whether property belongs in your super, and we’ll say so if you ask. What we do is the lending: which lenders will look at the fund, what they’ll want, how to structure the application, and running it alongside your accountant and adviser. The Burwood page says we coordinate directly with both, and on SMSF files it’s the only way they work.
Call 02 9037 2825 if you want the lending side explained before you take the strategy to your adviser.
This article is general information only, current as at September 2026. It doesn’t consider your objectives, financial situation or needs and isn’t financial product, tax or legal advice. SMSF trustees are personally responsible for the fund’s compliance. Get advice from a licensed financial adviser and your accountant before making any decision.
Frequently Asked Questions: SMSF Property Investment
Can an SMSF still buy residential property in 2026?
Yes, with cash. Since 10 August 2026 a new LRBA can’t be used to buy residential property, so the fund has to pay for it without borrowing.
Can an SMSF still borrow for commercial property?
Yes, for business real property, meaning land and buildings used wholly and exclusively in a business.
What happens to an SMSF loan taken out before 10 August 2026?
It continues as it is and can be refinanced.
Can I rent my SMSF’s property to my own business?
If it’s business real property and the rent is at market, yes, subject to the sole purpose test and the arm’s length rules, which is why you want your adviser and accountant across it. A residential property rented to a related party is an in-house asset and will breach the 5% cap in almost any fund.
Related reading
- SMSF Lending Isn’t What Your Bank Says It Is
- SMSF Loans Explained: How They Actually Work After 10 August 2026
- Can You Use Your Super to Buy a House?
- More on SMSF lending
Book a broker or find a broker near you. Or call the Burwood office on 02 9037 2825.
General information only. This article does not take your objectives, financial situation or needs into account, and is not financial product, tax or legal advice. Lending criteria, fees and rates vary by lender and change without notice. Loan Lounge, Australian Credit Licence 515608.