Buying an office, retail shop, factory or warehouse isn’t as straight forward as buying a residential investment property but we know some banks that can lend to a SMSF to buy commercial real estate.

How much can I borrow?

  • Borrow up to 75% of the value of a commercial property (even with bad credit).
  • Borrow up to 80% of the value of a residential property.
  • Borrow up to $10 million (higher on a case by case basis).
  • Loan terms of up to 30 years for commercial security properties (>20 years is case by case).
  • Interest only repayments for up to 5 years.
  • Discounted interest rates are available from some lenders.

Speak to our mortgage brokers by calling 1300 889 743 or fill in our free assessment form to find out if you can buy a commercial property in your SMSF.

Getting a sharp interest rate

Did you know that the banks have vastly different interest rates for SMSF loans used to buy a commercial property?

That’s because this is a relatively new area of finance and most borrowers don’t know what interest rates are on offer!

The banks charge higher interest rates, take less risk by limiting the loan amount and will not accept non-standard commercial and residential properties as security.

By using a mortgage broker you can be sure that you’re getting a competitively priced commercial loan.

How can we help?

Every client is different so it all depends on what you need.

If you have a large deposit and a relatively straightforward application then we can help to get you the lowest interest rate possible. We know which banks charge the same interest rates for SMSF loans as they do for standard commercial loans.

If you have a complex situation that’s difficult to approve then we’ll find a lender that can accept your situation. Lenders accept different property types, income evidence, interest cover ratios, trust structures and maximum loan sizes. Of course, we’ll then negotiate to make sure you get a great interest rate as well.

For large loans sizes we’ll negotiate on your behalf to get you the lowest interest rate possible. In most cases, we can get you a much better deal than you can get directly with your business banker.

Call us on 1300 889 743 or fill in our free assessment form and we’ll help to get your SMSF loan approved. However, we can’t help you if you want construction finance since that isn’t possible.

Your Property

Not every commercial property is accepted

The banks prefer SMSF loans to have a standard commercial property as security.

It’s relatively easy to finance:

  • Residential properties
  • Offices
  • Factories
  • Warehouses
  • Retail shops
  • Restaurants
  • Rural properties
  • Farms (conditions apply)

It’s harder to finance specialised properties such as:

  • Development sites
  • Vacant land (in some cases)
  • Properties in a poor condition
  • Single use securities such as pubs, petrol stations and day care centres

Don’t assume we can’t help!

Give us a call on 1300 889 743 or fill in our free assessment form and we’ll let you know if your property will be accepted.

Are you buying your business premises?

If you’re a business owner and you have an SMSF then there may be a tax, capital or investment benefit for you to sell your commercial premises to your SMSF.

It’s against the law to sell a residential property to your own SMSF, however, there are no such restrictions with commercial properties.

Some lenders will favour this type of transaction as opposed to the simple purchase of a commercial investment property within your SMSF.

You should seek financial advice from your accountant before you decide to sell your business premises to your SMSF as there are complex Capital Gains Tax (CGT) and SMSF legislation that needs to be considered as well as your own personal financial circumstances.

What is the legal structure of your SMSF?

Who is the trustee of your SMSF?

Having people as the trustee is a different legal structure to having a company as the trustee. Some lenders restrict the loan amount if the trustee is an individual, whereas others don’t.

In addition to this, some lenders will want to investigate the financial position of the members or they may require proof of their income if superannuation contributions are required to help make the loan repayments.

What documents do I need to provide?

Most of our lenders will require:

  • SMSF trust deed.
  • Custodian trust deed.
  • Tax returns for the SMSF (there are some exceptions).
  • Evidence of the rental income.
  • A full copy of the contract of sale.

SMSF Commercial Loan FAQs

Can I avoid giving a personal guarantee?

SMSF loans are what are known as a ‘non-recourse loan’ meaning that the lender cannot sell the assets of the SMSF to recover their money, except for the property that is used as security.

However, if the property is sold and the loan hasn’t been repaid in full then they can seek to recover money from the personal assets of the members/trustees.

If you have a large mortgage and a sizeable deposit then in some cases we can negotiate with the lender to exclude this clause from their agreement.

Can I refinance my current SMSF loan?

Yes, you can refinance your current SMSF loan to a lower interest rate as long as you aren’t increasing the size of the loan.

If your loan is more than a year or two old then it’s quite likely that your interest rate isn’t competitive.

Can I release equity to buy another property?

No, you aren’t able to refinance your SMSF loan and increase the size of the loan to buy another property, even if this property will also be in your SMSF.

Can I release equity as a business loan?

No, you can’t borrow for your business using a property in your SMSF as security.

The value of the property in your SMSF will contribute to your asset position and, therefore, help you to get your business loan approved but the equity in it can’t be accessed.

Why are the banks so conservative?

Banks are more conservative when lending to an SMSF because:

  • The mortgage is ‘non-recourse’ loan making it harder for them to recover their money.
  • The security property is commercial which means it can take them longer to sell.
  • This is a relatively new area of lending so there may be other risks.

What is an LRBA?

The Australian government gave Limited Borrowing Recourse Arrangements (LRBA) the green light as a way for SMSF trustees to borrow money to buy property.

The main benefit is that in the event that you default on your mortgage, you are liable to sell the single (or multiple) properties you purchased while the other assets in your SMSF are protected.

You can learn more about this on our What is an LRBA? page.

Apply for an SMSF commercial loan

Our mortgage brokers are specialists in SMSF loans and know which banks can approve your loan and give you a low interest rate.

Call us on 1300 889 743 or fill in our free assessment form to find out if you can buy a commercial property in your SMSF.

  • M. Joey

    Hi, your page states ‘conditions apply’ when it comes to financing Farms so what type of conditions will I need to meet?

  • Hi M. Joey,

    You’re generally required to meet certain conditions like restrictions to borrowing more than 70% of the property value if the land size is over 60 hectares or if you’re using it to generate income then this can drop to 60%. Different lenders can have a different set of conditions so please call us on 1300 889 743 if you’re looking to buy a farm using your SMSF.

  • Driscoll

    I want to purchase a warehouse for my wife’s business using my SMSF. The property costs around $500k and my wife’s business will be paying rent to the SMSF trust. We can provide real estate agent appraisal as well as rental agreement. Loan amount and LVR need to be confirmed at the moment although 70% LVR is what we’ve been thinking. Can Home Loan Experts help us?

  • Hey Driscoll,

    We have a few commercial lenders in mind who can consider your loan application and may be willing to offer a great rate as well. However, it’s likely that you may have to borrow 60% of the property value. Please call us on 1300 889 743 to discuss this with an expert commercial SMSF mortgage broker.

  • kones

    What documents will I be required to provide to the bank?

  • Hey kones,

    Most of our lenders will require you to provide:
    – SMSF trust deed.
    – Custodian trust deed.
    – Tax returns for the SMSF (there are some exceptions).
    – Evidence of the rental income.
    – A full copy of the contract of sale.

  • Timothy WM

    Can you please provide me some SMSF rates so I can plan out my mortgage a bit?

  • Hi Timothy,

    Yes, please check out the commercial loan interest rates page to find the SMSF commercial rates under the “Commercial Loans” section. Here’s the link to the page:

  • clement

    Apart from SMSF dividend and interest income, what else will the banks assess?

  • The banks will also assess your employer superannuation contributions, additional voluntary contributions and rent income on the new investment property.

  • Jake Wearing

    Can I use an SMSF to buy residential property to run a Family Day Care business, whilst living in the premises?

  • Hi Jake,
    I don’t believe this would be allowed. It’s best to check with an accountant who specialises in SMSF to be sure.

  • Pearce

    I have applied for an SMSF loan with CBA to buy a warehouse as an investment but got knocked back. Are there any possible alternatives?

  • Hi Pearce,
    Commonwealth bank recently stopped lending to SMSFs for both residential and commercial properties. It follows the departure of Westpac from the SMSF loan space. We’re not sure if other banks will follow but, luckily, there are second-tier lenders that still offer commercial loans to buy a standard commercial property for a self-managed super fund. Call us on 1300 889 743 or enquire online and speak with a self-managed super fund specialist for other possible alternatives.

  • Mick

    I’m planning on purchasing a commercial property in my SMSF to use as the space for my private practice (Psychiatrist). I switched to the private sector after a decade long stint in the public sector. I haven’t made any contributions to my superannuation for the past year since I switched from PAYG to self-employed. I have two questions.
    1. How much of the rental income can be assessed as I’ll be paying rent to my SMSF?
    2. How much of a history of my current super contribution is required?

  • Hi Mick,
    As for your first question, you’ll be required to pay the market rental rate even though the property may be held in your SMSF (arm’s-length transaction). Lenders only consider 80% of the market rental income to account for property maintenance, repairs and management fees.
    Regarding your second question, you will need to start contributing now as you’ll need to show regular and ongoing contribution to your SMSF to qualify for a commercial SMSF loan.