SMSF commercial property loans in Australia

Yes, a self-managed super fund can borrow to buy commercial property. The loan runs under a Limited Recourse Borrowing Arrangement (LRBA), the asset sits in a separate bare trust, and the lender’s recourse on default is limited to that one property. Indicative rates run roughly 6.5% to 9% per annum, with LVR up to around 65% on commercial SMSF security. The lender confirms the final position on application.

Windsor Finance is a finance broker, not a lender. We hold no capital of our own and approve nothing. We take your fund’s purchase to a panel of Australian bank and non-bank lenders that write SMSF commercial loans, then place it with the one that fits on rate, LVR, and appetite. The pool for SMSF commercial finance is smaller than for ordinary commercial loans, which is where a broker earns its keep. For the wider product, including residential SMSF purchases, see the SMSF property loans hub.

Why commercial property suits an SMSF. Commercial property has one feature that makes it the natural fit for super: business real property can be acquired from, and leased back to, a related party at arm’s length. That rule lets a business owner hold their own premises inside their fund. Your trading company can rent its warehouse, office, or shopfront from your SMSF. The rent is a deductible expense for the company and an income stream for the fund, provided it is set at a genuine market rate on a formal lease. Residential property cannot work this way: a member or relative cannot live in or rent a home the fund owns. Business real property is the exception, and the fund builds an asset the business pays down through rent it would otherwise pay a landlord.

How the loan is structured. An SMSF commercial loan is not a standard mortgage. Three parts must be in place before any lender will settle. The complying SMSF, the fund must be set up and complying, with a trust deed that permits borrowing under an LRBA. The bare trust (holding trust), a separate bare trust, usually with a corporate trustee, holds legal title until the loan is repaid; the SMSF holds the beneficial interest and the right to take legal ownership once the loan is discharged. The limited-recourse loan, the lender’s recourse on default is limited to the single property in the bare trust, your fund’s other assets are protected, and that limited recourse is why SMSF loans price above ordinary commercial loans and why lenders set conservative LVR limits.

The asset must be a single title; you cannot bundle several unrelated titles under one LRBA. Lenders assess the fund and the asset, not a personal income test. Serviceability is built from the proposed lease rent plus contributions and other fund earnings, against the lender’s buffer. A formal, market-rate lease on arm’s-length terms supports the application; a vague or below-market one does not.

Indicative rates, LVR and loan size. Every figure here is indicative; the lender sets the final terms on application after it sees the security and the fund’s position. Indicative rate, roughly 6.5% to 9% per annum, above standard investment lending because of the limited-recourse structure and smaller pool. LVR, up to around 65% on commercial SMSF security; specialised or single-use property may sit lower. Loan size, broadly $150,000 to $5m. Speed, indicative terms in 1 to 2 weeks, settlement in 4 to 8 weeks end to end; trust setup and adviser sign-off can add time, so start early. A lower LVR widens your lender choice and usually sharpens your rate. Standard office, retail, and industrial security in a metropolitan market prices better than a specialised asset in a thin market.

The advice you need first. This is the part no broker should skip. Windsor arranges SMSF commercial finance. We do not give superannuation, tax, or financial product advice, and the LRBA carries compliance obligations that sit outside lending. Before you proceed, you need independent advice from a licensed financial adviser and your SMSF specialist or accountant. They confirm the strategy suits the fund, the trust deed allows the borrowing, the bare trust is correct, and the lease is compliant. SMSF lending sits under superannuation law and ATO oversight, not consumer credit. We refer SMSF strategy to an independent licensed adviser. We are happy to take your enquiry while you arrange that advice. We simply cannot fund a purchase until it is in place.

One LRBA rule also trips up trustees who plan to improve the property. You can carry out repairs and maintenance, but you cannot make capital improvements that change the character of the asset, particularly if funded by borrowings. Replacing a warehouse roof is maintenance. Converting it into apartments, or subdividing the title, changes the asset into something different and is not permitted under the LRBA while the loan stands. Raise any plan to change the property with your adviser and with us early, because it shapes which lender fits.

How a broker places an SMSF commercial loan. Far fewer lenders write SMSF commercial loans than ordinary commercial mortgages, and their policies differ sharply on LVR, lease requirements, acceptable security, and how they assess fund serviceability. Walk into one bank and you get one answer against one policy. A broker checks the SMSF-active lenders on the panel at once, so you see which one actually fits your fund rather than the only one your bank offers. We hold no balance sheet, so there is no product to push. We also package the file so the lender’s credit team sees a clean LRBA the first time: the bare trust documented, the lease in order, the serviceability laid out clearly. A correctly packaged SMSF file moves; a messy one stalls in credit for weeks. We coordinate with your adviser and solicitor so the trust, the loan, and the settlement line up.

A note on regulation and purpose. SMSF lending under an LRBA is overseen through superannuation law and the ATO, not consumer credit. Commercial SMSF lending is business-purpose finance and sits outside the National Consumer Credit Protection Act 2009. Windsor Finance is a finance broker. The purpose of each deal is confirmed in writing before it proceeds. We arrange SMSF finance and do not provide superannuation, tax, or financial product advice. Trustees must obtain independent advice before proceeding. Every rate, fee, and LVR on this page is indicative; the lender confirms on application. For the full product, including residential SMSF purchases, see SMSF property loans.