SMSF Loan Australia FAQ, answered by an SMSF Lending Expert.

An SMSF property loan is constituted as a Limited Recourse Borrowing Arrangement (LRBA) under section 67A of the SIS Act. The fund borrows to acquire a single acquirable asset, which is held by a custodian on bare trust until the loan is discharged. On default, the lender's recourse is limited to that asset, every other investment held by the fund remains insulated.

Most SMSF-active lenders cap residential LVR at 70% and commercial at 65–75%, with a small group of specialist lenders extending to 80% on residential. Servicing is assessed against the fund's contributions and the asset's contracted rental income, applied to the lender's stressed assessment rate.

These are two distinct numbers. Your borrowing capacity is what your fund's income (concessional contributions plus assessed rent) can service at the lender's stressed assessment rate — it represents the maximum loan size you could theoretically support. The loan you can actually draw on a specific property is separately constrained by that asset's maximum LVR (typically 80% residential, 70% commercial, 65% NDIS), the deposit and liquidity reserves your fund holds, stamp duty, and the lender's net-asset test. A fund with strong income may have a $700,000 capacity yet only be able to draw $360,000 against a $400,000 residential property because the 90% LVR ceiling caps the loan-to-security ratio. Comparison engines like Quickli display the income-led number; brokers reconcile both before settlement.

The 2026 Budget left section 67A SIS Act untouched, LRBAs remain available on the same statutory footing as before. The Division 296 measure was reaffirmed at a nominal, un-indexed $3 million threshold, which compresses the real planning horizon during which leveraged property held inside super is taxed at concessional rates (15% in accumulation, 0% in pension phase) rather than at marginal rates of up to 47% outside super.

There is no legislated minimum, but most lenders expect a fund balance of at least $200,000 and a post-settlement liquidity ratio of approximately 10% of total fund assets. We model your fund's exact position, balance, liquidity, contribution profile and member ages, before any lender is approached.

Not for residential property. The sole purpose test and in-house asset rules prohibit a member, relative or related party from leasing or occupying a residential SMSF asset. Commercial property is the principal exception: business real property may be leased back to a related-party business at arm's-length market rent.

Where the SMSF, corporate trustee, bare trust and custodian are already in place, settlement typically completes in 30–45 days from application. Where the structure must be established as part of the engagement, allow 6–8 weeks end to end.