Investment & SMSF Finance

The right structure before the right rate

Most investors get shown a rate. The structure question, which entity buys it, how the debt sits, what the exit looks like, gets left to the accountant after the fact. That order tends to be expensive. Getting the structure right before you commit to a purchase is worth considerably more than the margin between the cheapest and second cheapest rate in the market.

That applies to standard investment lending and it applies even more to SMSF. A loan inside a self managed super fund is governed by a different set of rules, requires a specific legal structure, and involves a borrowing arrangement that looks nothing like a standard mortgage. The lender list is shorter, the conditions are more exacting, and mistakes made at the start are difficult and costly to unwind.

What we can help with

• Investment property finance, including for self-employed borrowers and complex income structures
• SMSF limited recourse borrowing arrangements (LRBA) for commercial property
• Business owners buying their own premises through super
• SMSF investment in commercial property for yield including industrial, retail and medical
• Portfolio refinancing and debt consolidation for existing investment property owners
• Structuring advice prior to purchase, before any lender is approached

Why SMSF commercial property is the play right now

The 2026 federal budget closed several previously available paths for residential property investors. Negative gearing on new purchases has tightened, CGT discount treatment has changed for new investors, and the OO-to-investment property conversion benefit that many investors relied on is being wound back.

SMSF commercial property sits outside most of those changes. A self managed super fund that purchases commercial property, including business premises occupied by a related party, continues to benefit from concessional tax treatment on rental income and, for members in pension phase, potentially zero tax on income and capital gains. For business owners who are also trustees, buying the premises through super rather than personally or through a trust remains one of the strongest structural advantages available in the Australian tax system.

This is not a loophole. It is the intended use of the SMSF structure, well established under SIS legislation and ATO guidance. But it is complex to execute correctly, and the margin for error in the borrowing arrangement is low.

The tax rates inside a super fund are set by legislation and do not vary by income bracket. Rental income is taxed at 15 per cent. Capital gains on assets held for longer than 12 months are taxed at 10 per cent. For a member in pension phase, where the fund is paying a superannuation income stream, both income and capital gains can be subject to zero tax. Against a personal marginal rate of up to 47 per cent for a high-income earner, the structural gap is material and the 2026 budget has made it wider.

How SMSF lending works in practice

SMSF borrowing for property requires a limited recourse borrowing arrangement. Under an LRBA the asset is held in a bare trust, separate from the SMSF, until the loan is repaid. The lender has recourse only to the property itself, not the other assets of the fund. This structure protects the fund but it also means the loan is assessed differently, with lower LVRs, different serviceability criteria, and a requirement that the fund, not just the member, can demonstrate it can service the debt.

Not all lenders offer SMSF lending. Of those that do, appetite varies significantly by property type, fund structure, member age, and existing fund assets. Knowing who to approach and how to present the fund before any application is made is the difference between a smooth process and a series of conditional approvals that go nowhere.