Buying commercial property in your SMSF, the lending side done properly.

The one property purchase where super rules work for you

Rockwall Finance arranges SMSF loans for commercial property in Perth and across Australia, with a particular focus on business owners buying the premises their own business operates from. We are credit specialists on the lending side of these deals; whether buying property in super suits your circumstances is a decision you make with your financial adviser and accountant, and the structures only work when all three of us are pulling in the same direction. This guide covers the part we own: how the borrowing actually works.

Commercial property holds a special position in superannuation rules. An SMSF can generally buy business real property and lease it to a related party, including your own company, as long as the arrangement runs on commercial terms with a market rent. Your business pays rent it would have paid a landlord anyway. The rent lands in your fund. That is the engine of the strategy, and the borrowing is what makes it reachable before the fund could buy the property outright.

How the borrowing works: the LRBA

A super fund cannot simply take out a mortgage. The only permitted structure is a limited recourse borrowing arrangement: the property sits in a separate holding trust while the loan exists, and the lender's recourse if things fail is limited to that property, never the rest of your retirement savings. In practice the structure involves your fund, the holding trust, the lender, and usually personal guarantees from the members. The order of operations matters enormously. The holding trust and purchaser structure needs to be confirmed with your solicitor before you sign or exchange, the names on the contract must be exactly right, and lenders will not bend on structural errors. Deals fail on paperwork here more than on credit.

The numbers lenders work with

• Loan to value: most lenders sit between 60 and 80 percent of the property value, with the balance funded from the fund's own money.
• Liquidity: many lenders want a buffer left in the fund after settlement, so the fund is not all bricks and no cash.
• Servicing: assessed on the property's rent, the fund's contribution history and fund income, with some lenders also reviewing member income and contribution capacity.
• Fund balance: minimums vary by lender, and the right lender for a large established fund is rarely the right one for a newer fund.
• Property types: standard commercial, industrial and office stock is widely accepted; specialised assets narrow the field.

Why most banks have stepped back, and where the market is now

Most major banks withdrew from SMSF lending years ago. The market now belongs to specialist and non bank lenders whose policies differ widely on fund balance minimums, liquidity rules, acceptable properties and pricing. This is a genuine policy maze, and it is the reason these loans are overwhelmingly broker arranged: the work is matching your fund, your property and your timeline to the lender whose policy actually fits. We run that comparison before anything is signed, and we coordinate with your accountant so the structure and the loan land together.

Where this connects to the rest of your position

For most of our clients the SMSF premises purchase is one move inside a bigger picture: a business that is growing, equipment on finance, sometimes an acquisition in play. The premises decision interacts with all of it, lease terms affect business value, rent affects serviceability on both sides, and the timing has to respect the fund's liquidity. Because we work across commercial finance, commercial property finance and business acquisitions, we structure the SMSF loan as part of the whole position rather than a transaction in isolation.

Frequently asked questions