Insights
Here’s the simplest way to frame it. An SMSF generally can’t borrow. The main exception people use for property is an LRBA, and it comes with constraints that are easy to miss.
This guide is a practical checklist of what’s usually allowed, what’s usually not, and what you should ask your accountant or adviser before going further.
Most SMSF borrowing in the real world looks like this.
These are the common compliance traps.
If you do nothing else, tick these off.
These questions keep you out of trouble and stop you buying the wrong asset for your fund.
Start by choosing a realistic price range and running the numbers with conservative assumptions. Then pressure test the scenario with higher rates, a vacancy period, and maintenance costs. If it still feels calm, it’s worth progressing with the right advice. If it feels tight, that’s valuable information too.
Want to see what the repayments could look like? Use our Loan Repayment Calculator to test different loan amounts, rates, terms and repayment frequencies. It can also show how extra repayments may change the total interest paid over time.
This is a common misconception. SMSF borrowing rules are strict and borrowed funds are meant for acquiring the LRBA asset. Talk to your accountant before assuming construction is possible.
Commercial property can be treated differently in some cases, but it still has strict requirements and must be on market terms. Speak with your accountant and adviser.
Using the property personally, or structuring the purchase incorrectly before contracts are signed.
In practice, borrowing is usually structured one property per LRBA because of the single asset rule.
Yes, it’s strongly recommended. SMSF borrowing involves legal, tax, and compliance considerations.
We can help you sense check structure, borrowing power, and next steps so you can move forward confidently, without creating a compliance headache later.
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