Commerical Property
SMSF
Use your Self Managed Super Fund to grow your retirement
Self-Managed Super Funds aren’t able to borrow to invest in residential property but many trustees use their SMSF to acquire commercial real estate, particularly a business premises used by their own company or a related operating business.
Commercial SMSF lending allows a fund to purchase assets such as offices, warehouses, medical suites, retail shops or industrial units through a Limited Recourse Borrowing Arrangement (LRBA). This structure enables the SMSF to borrow while ensuring the lender’s recourse is limited to the property held within the arrangement.
For many business owners, this can create a powerful alignment between their business operations and long-term retirement strategy. Instead of paying rent to a third-party landlord, the business may lease the premises from the SMSF at market rates, helping to build wealth within the super environment.
At Etairos Finance, we assist trustees and their advisers in structuring commercial SMSF loans with lenders who understand this specialised area of lending.
How Commercial SMSF Lending Works
Commercial property lending through an SMSF uses a Limited Recourse Borrowing Arrangement (LRBA), with lenders considering a range of factors relating to the property, the SMSF and the proposed loan structure.
Key considerations typically include:
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Property type – Commercial assets may include offices, industrial units, warehouses, medical suites or retail premises.
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Tenant arrangements – In many cases, the tenant may be the trustee’s own business leasing the premises at market rent.
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Loan assessment – Lenders often focus more heavily on the lease income and business strength rather than personal income alone.
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Deposit requirements – Commercial SMSF lending commonly requires a substantial contribution from the SMSF, with maximum loan-to-value ratios varying between lenders and property types.
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Loan terms – Loan structures and repayment terms can differ, with lenders often tailoring facilities to the property type and lease profile.
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Valuation considerations – Commercial properties are assessed based on yield, lease length, tenant quality and location rather than comparable residential sales.
Specialists in Limited Recourse Borrowing Arrangements
While there are clear guidelines about what your Fund can do and can't do, borrowing to invest within your SMSF follows similar fundamental principles as borrowing to invest outside your fund.
Some of the key benefits of borrowing within an SMSF to invest in property are:
Increased Purchasing Power
Loan Repayments
Asset Protection
Tax Concessions
Latest SMSF
interest rates
The comparison rate provided is based on a loan amount of $250,000, term of 25 years, principal & interest repayment. It only applies to the examples given. Different amounts and terms will result in different Comparison Rates.
*
SMSF Investment 2 year fixed P&I
Starting from
7.29
%
p.a
Comparison Rate *
7.46
%
p.a
SMSF Investment Variable P&I
Starting from
%
p.a
7.04
Comparison Rate *
7.25
%
p.a
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