Buying commercial property inside a self-managed super fund is one of the few strategies that lets a business owner combine super savings with borrowed money to hold a real, income-producing asset. Done right, the premises your business already pays rent on can sit in your fund, with that rent building your retirement instead of a landlord's.
Can you buy commercial property with your super?
Yes. Your self-managed super fund can buy commercial property outright with the fund's cash, or with a smaller deposit by borrowing the rest through a Limited Recourse Borrowing Arrangement (LRBA). The standout feature, and the reason so many Sydney business owners do it, is that your own business can lease the property back from the fund at market rent. That is not allowed with residential property held in super.
We arrange these loans through our commercial SMSF lending service, which sits alongside our broader SMSF loans work. If you want the full picture of holding property in super first, our SMSF property investment guide is a good primer.
Commercial premises held in an SMSF can be leased back to your own business at market rent.
How an SMSF commercial property loan works
An SMSF commercial loan is structured as an LRBA. The word limited recourse matters: if the loan ever defaults, the lender can only claim the single property being purchased, not the rest of your fund. To make that work, a separate holding trust (often called a bare trust) holds legal title to the property while the loan is outstanding, and title transfers to the fund once the loan is repaid.
The rent the property earns flows into the fund and helps service the loan, in a concessionally taxed environment. For a business owner buying their own premises, the rent the business pays is generally a deductible business expense, while the same money builds a retirement asset the members control.
The numbers: deposit, leverage, and interest rates
SMSF commercial lending sits with a smaller panel of specialist lenders, and the numbers differ from a standard loan. Here is a realistic 2026 guide.
| Measure | Typical position |
|---|---|
| Maximum leverage | Up to 65% of value, sometimes 70% for strong assets |
| Minimum fund contribution | 35% or more of price, plus stamp duty and costs |
| Interest rate guide | High 6% to 8%, varies by lender and asset |
| Rent tax (accumulation) | 15%, and can be 0% in pension phase |
| Capital gains after 12 months | Effective 10% in accumulation, 0% in pension phase |
Because leverage is capped near 65%, your fund usually needs at least 35% of the price plus costs and a liquidity buffer. On a $1,000,000 property that is roughly $350,000 in the fund before settlement. Model your repayments with our loan repayment calculator and test overall capacity with the borrowing power calculator, then we confirm the real numbers for your fund.
Work out your fund's cash requirement before you make an offer, not after.
Leasing the property back to your business
This is the heart of the strategy. Business real property, meaning property used wholly and exclusively in a business, is an exception to the general ban on related-party transactions in super. So your fund can buy the premises your business operates from, including buying them from you, and lease them straight back.
The lease must be at a market rent set by an independent valuation, and it must be documented and actually paid. Get that right and you convert an operating cost into a contribution toward your own retirement. Many owners also use the move to free up capital tied in their business premises.
Setting up the structure the right way
The structure has to be in place before you exchange contracts. Fixing errors afterward is expensive and can breach superannuation rules. A compliant setup needs:
- Your SMSF as the borrower under the LRBA
- A bare trust holding legal title until the loan is repaid
- A corporate trustee for that holding trust
- An up to date fund investment strategy that allows the purchase
- A market-rent lease if your business will occupy the property
We coordinate with your accountant and adviser so the loan and the trust line up. If you are weighing structures more broadly, our guide to buying property in a trust explains how related structures work.
The rules that keep your fund compliant
SMSF borrowing is tightly regulated. The property must meet the sole purpose test, held only to provide retirement benefits. Borrowed funds cannot be used to improve the property in a way that changes its character. The fund must keep enough liquidity to cover repayments and expenses, so tying up too much of the fund in one property is a real risk to weigh. Loans are limited recourse, but lenders often still require personal guarantees from members.
A compliant LRBA structure, set up before you exchange, is what keeps the strategy working.
Is buying commercial property in super right for you?
It suits business owners who want to own their premises, and investors who want commercial exposure in a tax-effective environment, provided the fund has the balance and liquidity to support it. It is less suitable if the purchase would leave the fund concentrated in a single illiquid asset with little buffer. The honest answer depends on your fund, and that is exactly what we assess.
If you want a broker to run the numbers and coordinate the structure, book a free strategy call or reach out through our contact page. As a Sydney mortgage broker based in Norwest, we work with business owners across the city and the Hills District.
Ready to talk to a broker?
If buying commercial property in your SMSF is on your radar, we will model the numbers, check your fund against lender policy, and coordinate the structure with your accountant so it is right the first time. Book a free strategy call and we will map it out.
Quick answers
Frequently asked questions
Yes. Through a self-managed super fund you can buy commercial property with the fund's cash, or borrow the balance through a Limited Recourse Borrowing Arrangement. The key advantage is that your own business can lease the property back at market rent, which is not permitted for residential property in super.
Because SMSF commercial loans are usually capped near 65% of value, the fund typically needs at least 35% of the purchase price, plus stamp duty, legal costs, and a liquidity buffer. On a $1,000,000 property that is roughly $350,000 plus costs held in the fund before settlement.
Rates are higher than standard residential loans, commonly in the high 6% to 8% range in 2026, depending on the lender, the property, the lease, and the strength of your fund. Compare the all-in cost including fees rather than the headline rate alone.
Yes. Business real property can be bought by the fund, including from you or a related party, and leased back to your business at market rent. This turns rent you already pay into contributions toward your retirement and can free up capital in the business.
A Limited Recourse Borrowing Arrangement with your SMSF as borrower, a separate bare trust holding title while the loan runs, and a corporate trustee for that trust. The structure must be set up before you exchange contracts.
Rent is taxed at the concessional super rate of 15% in accumulation phase and can be 0% in pension phase. Capital gains on property held longer than 12 months are taxed at an effective 10% in accumulation and can be 0% in pension phase. Confirm your position with your accountant.
Concentration risk if too much of the fund sits in one illiquid property, liquidity risk if the fund cannot cover repayments, and compliance risk if the structure or lease is wrong. We structure the deal to keep the fund compliant and flag liquidity before you commit.
For most deals we are paid by the lender on settlement, so there is no direct broker cost. Some complex transactions carry a broker fee that we disclose in writing upfront. The bare trust and legal setup costs are separate and handled by your accountant or solicitor.
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Buying property to invest? Get the structure right first.
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