Using an SMSF commercial property loan is a practical way to grow your super by allowing your fund to invest in commercial real estate.
Super - short for superannuation - is money set aside while you work to support you in retirement. With a Self-Managed Super Fund (SMSF), you control how that money is invested.
This type of loan lets your SMSF buy a commercial property, like a shop, office, or warehouse, under strict rules that protect your retirement savings. For business owners, it can mean paying rent to your own fund instead of a landlord. With Queensland’s solid rental yields and relatively affordable commercial property prices, it’s a strategy many are exploring.
In this guide, we’ll explain what an SMSF commercial property loan is, how it works, and how to apply for it.
Need help with an SMSF commercial property loan in Queensland? Speak to the experts at Zest Mortgage Solutions, local brokers who understand the rules, lenders, and setup from start to finish. Call us on (07) 3461 6499 or visit zestmortgagesolutions.com.au.
What is SMSF Commercial Property Loan?
An SMSF commercial property loan is a specific type of borrowing used by a Self-Managed Super Fund to buy commercial real estate. These properties could include offices, warehouses, factories, medical suites, or retail spaces used purely for business, not residential living.
A Self-Managed Super Fund (SMSF) is a private super fund that you manage yourself, either on your own or with up to five members. Unlike retail or industry super funds, an SMSF gives you direct control over how your super is invested, including the option to borrow under limited conditions.
The key difference between this and a typical SMSF loan (used for residential property) lies in who can use the property. Residential property bought through an SMSF can’t be lived in or rented by a related party. With commercial properties, however, your business is allowed to lease the space, provided it’s on commercial terms.
This makes SMSF commercial loans especially useful for business owners who want their super fund to hold their business premises. Instead of paying rent to a third-party landlord, rent is paid to your SMSF, helping to build retirement savings.
It’s also a popular choice for long-term investors looking to diversify their funds into more stable, income-producing assets.
Can You Use Your SMSF to Buy Commercial Property in Queensland?
Yes, you can use your Self-Managed Super Fund to buy commercial property in Queensland if it complies with the rules set by the Australian Taxation Office (ATO).
Legal Rules Under the ATO
The ATO allows SMSFs to invest in commercial real estate as long as the purchase meets specific conditions designed to protect your retirement savings. The two key compliance checks are:
- Sole-Purpose Test: The property must only be used to help provide retirement benefits to SMSF members. You can’t use it for personal gain outside of the fund.
- Arm’s-Length Rule: All transactions—buying, leasing, rent paid—must be on commercial terms, just like you would with a third party. This applies even if you're leasing it to your own business.
Eligible Property Types in Queensland
You can purchase a wide range of commercial properties through your SMSF, including:
- Warehouses and industrial units
- Retail shopfronts and shopping strips
- Office buildings and medical suites
- Commercial land or mixed-use spaces (as long as the residential portion isn’t used by related parties)
Residential properties are not allowed unless they meet strict business-use conditions and aren't occupied by related parties.
Looking to invest in commercial property through your SMSF in Queensland? Our Queensland mortgage brokers understand the fine print and help you find the right lender for your fund’s needs. Call us today at (07) 3461 6499 or visit zestmortgagesolutions.com.au to get expert advice today.
How Does an SMSF Commercial Property Loan Work?
An SMSF commercial property loan works under a special structure called a Limited Recourse Borrowing Arrangement (LRBA). This setup is designed to protect the rest of your super fund's assets if the loan goes bad; meaning the lender can only claim the property tied to the loan, not your entire SMSF.
Here's how it typically functions:
- The loan is taken out by a separate legal structure (a bare trust) on behalf of your SMSF.
- The property is legally held in this bare trust until the loan is fully paid off.
- Your SMSF makes loan repayments from a mix of rental income and contributions to the fund.
- Any rental income collected from the property goes back into the SMSF, helping cover repayments and building the fund over time.
The SMSF is still the beneficial owner and receives all income and capital gains, even though the bare trust holds the legal title during the loan term.
Simple Scenario:
Let’s say your SMSF has $300,000 in available funds. You want to buy a warehouse in Brisbane worth $700,000. Here’s how it might look:
- Purchase price: $700,000
- Loan (70% LVR): $490,000
- SMSF cash contribution: $210,000
- Additional setup and legal costs: ~$20,000 (covered from SMSF cash)
- Expected rent per year: $52,000 (approx. 7.4% yield)
- Loan interest rate: 7%
- Annual loan repayment: ~$40,000
Your SMSF would use the $52,000 rental income to repay the $40,000 loan annually, with surplus going back into the fund or used for expenses like council rates and insurance.
This setup keeps your fund compliant while generating income and helping grow your retirement savings.
Why Queensland Is a Hotspot for SMSF Property Investment
Queensland continues to attract SMSF investors in 2025 thanks to its mix of affordability, high rental yields, and growing demand for business premises. Compared to Sydney and Melbourne, commercial property prices remain more accessible, while returns are often stronger.
Key reasons Queensland stands out:
- Strong rental yields: Brisbane industrial properties are offering average gross yields of 5.3% to 6.1% in early 2025, outperforming most capital cities. (SQM Research – Weekly Property Data)
- Affordable entry price: The median price for Brisbane office and industrial spaces remains under $800,000, which suits many SMSF budgets. (Colliers Brisbane Market Report)
- Population growth: Queensland is expected to add over 1.5 million new residents by 2046, boosting demand for commercial services and real estate. (Queensland Government Population Projections)
- Business migration: Many SMEs are relocating from southern states for lower overheads and better lifestyles, leading to demand for leased commercial space.
For business owners, using an SMSF commercial property loan in this climate means buying a space for your own operations while building retirement wealth. With yields covering loan costs and potential for long-term growth, Queensland offers a rare win-win in today’s market.
Pros and Cons of SMSF Commercial Property Loans
Like any investment strategy, using your SMSF to buy commercial property comes with both upsides and risks. Here’s a quick look at what you should weigh before moving forward.
Pros
- Tax efficiency: Rental income is taxed at only 15%, and 0% in retirement phase.
- Business control: You can lease the property to your own business—on commercial terms.
- Long-term growth: Commercial real estate often delivers steady value appreciation.
- Asset protection: Property held in super is generally shielded from personal creditors.
Cons
- Setup complexity: Trusts, legal structures, and compliance can be costly and time-consuming.
- Low liquidity: Selling commercial property takes time—funds aren’t easily accessible.
- Loan limits: Lenders often restrict borrowing to 60–70% LVR, meaning large upfront contributions are needed.
- Risk concentration: Putting too much of your super in one asset increases exposure.
What are the SMSF Commercial Property Loan Requirements in Queensland?
Getting an SMSF commercial property loan isn’t as simple as a regular mortgage. Lenders and the ATO have strict conditions to make sure your fund remains compliant and financially secure. Here’s what’s typically needed in Queensland:
Key Financial Requirements
- Minimum SMSF balance: Most lenders require your fund to hold at least $200,000–$250,000 in net assets. Some may ask for more, depending on the property value.
- Loan-to-Value Ratio (LVR): Usually capped at 60%–70%, meaning your SMSF needs to cover 30–40% of the property price plus costs.
- Rental yield or income: Your SMSF must have enough rental income or consistent member contributions to cover loan repayments. Lenders often look for rental yields above 6% or solid contribution history.
Compliance and Structure Requirements
- ATO-compliant fund: Your SMSF must be set up correctly, with a trust deed that allows property investment.
- Investment strategy: Your fund’s documented investment strategy must show that buying commercial property fits your retirement goals.
- Bare trust setup: A separate legal structure (bare or holding trust) is required to hold the property's legal title during the loan term.
- Corporate trustee preferred: Most lenders favour SMSFs with a corporate trustee for smoother lending and clearer ownership structure.
Loan Application Documents
- SMSF’s last 2–3 years of financial statements and tax returns
- Rental appraisal or lease agreement for the property
- Evidence of ongoing contributions (employer or personal)
- Property valuation report from an approved valuer
- Insurance in the name of the SMSF
- Cash buffer: Some lenders want at least 10% of the property value left untouched in the SMSF
Restrictions to Know
- No redraw or offset accounts allowed
- You can’t borrow to build or develop; only to purchase an existing acquirable asset
- The property must pass the arm’s-length rule and sole-purpose test
- No residential use unless it’s purely for business and complies with ATO exceptions
Meeting these requirements is crucial not just for loan approval, but also to keep your SMSF compliant with tax laws and protected from legal risks.
Not sure if your SMSF meets the loan requirements? Our Queensland mortgage brokers at Zest Mortgage Solutions can walk you through what lenders are really looking for. Call (07) 3461 6499 or visit zestmortgagesolutions.com.au to get clarity before you apply.
How to Apply for an SMSF Commercial Property Loan: Step-by-Step Guide
Applying for an SMSF commercial property loan in Queensland involves more moving parts than a regular home loan. You’ll need to tick off a strict list of setup, structure, and compliance requirements to meet both lender and ATO standards.
Here’s a step-by-step guide that breaks down the full process clearly and simply.
Step 1: Review Your SMSF Setup and Strategy
Check that your SMSF rules, trust deed, and structure allow for SMSF property purchases. Make sure you have a documented SMSF investment strategy that shows why commercial premises fit your retirement plan and asset mix.
Step 2: Get Professional Advice
Before doing anything else, seek professional advice from an SMSF accountant, mortgage broker, or financial adviser. This helps you understand tax implications, borrowing capacity, and the rules around buying a single property with a loan.
Step 3: Confirm Your SMSF Has Sufficient Funds
Most financial institutions and non-bank lenders require a super balance of at least $200,000–$250,000. You’ll also need sufficient funds to cover the deposit, stamp duty, property expenses, legal fees, and a cash flow buffer in the fund. Lenders will assess your SMSF assets, income contributions, and ability to meet repayments.
Step 4: Engage a Real Estate Agent and Find a Property
Work with a local real estate agent to find a suitable type of property; it must be an investment property classified as real property (not development land or mixed residential). Ensure the property suits your fund's needs, fits within your budget, and aligns with your SMSF lending conditions.
Step 5: Get Pre-Approval from a Lender
Approach non-bank lenders or specialist brokers who understand SMSF lending and offer competitive rates for commercial property investments. This stage includes assessment of the SMSF trustee, fund contributions, and whether the deal matches market rates.
Step 6: Set Up a Bare Trust and Custodian Trustee
Before signing a contract of sale, you’ll need to establish a separate trust (often called a bare trust) with a custodian trustee. This trust will legally hold the title of the commercial property during the loan term. It’s a key part of keeping the loan compliant under SMSF rules.
Step 7: Sign the Contract of Sale (Correctly)
When making a property purchase, the property contract must be signed by the bare trustee, not the SMSF itself. This avoids legal and taxable income issues later. The property must be a single asset and not part of a staged property developer release or dual-title structure.
Step 8: Final Loan Approval and Settlement
Submit all required documentation to the lender, including SMSF bank statements, tax returns, contribution history, and lease agreements. Once the loan is formally approved, the deal moves to settlement. Your fund will start receiving rent and loan repayments will begin.
Step 9: Set Lease Terms and Manage Ongoing Compliance
If you're leasing the property to your own business, the lease must reflect commercial property market conditions, with rent set at market rates. Lease terms should be clear and in writing. This ensures you get the tax benefits without breaching compliance.
Step 10: Track Performance and Make Extra Contributions
After purchase, keep records of all property SMSF expenses and returns. Monitor how the property fits with other asset classes in your fund. If cash flow allows, make extra contributions to reduce the loan balance faster, keeping in mind personal income tax rate limits and taxable income rules.
Following these steps helps avoid costly missteps and keeps your SMSF trustee on track to benefit from a strong commercial property market and long-term investment growth.
Do You Need a Mortgage Broker for SMSF Commercial Loans?
SMSF loans are more complex than standard loans, and not all lenders handle them. That’s where a mortgage broker with SMSF experience becomes extremely useful.
Why a Mortgage Broker Helps:
- Specialist knowledge: They understand SMSF structures, lending rules, and how to avoid compliance risks.
- Lender access: Brokers work with both banks and non-bank lenders, helping you find better competitive rates and terms.
- Structure support: They guide you through bare trust setup, trustee requirements, and loan application details.
- Saves time: They handle paperwork, follow-up, and help avoid delays that can affect your property purchase.
- Better outcomes: A broker can spot lender issues early and match you with SMSF-friendly financial institutions that align with your fund’s goals.
Zest Mortgage Solutions has helped hundreds of SMSF trustees across Queensland make smart, compliant commercial property moves. Call (07) 3461 6499 or visit zestmortgagesolutions.com.au to chat with a broker who knows the rules.
Frequently Asked Questions (FAQs)
How to use SMSF to buy commercial property?
To buy commercial property through your SMSF, your fund must meet lender requirements, hold a minimum balance, and follow a strict application process. The property title is held by a separate asset in trust, and all transactions must benefit fund members in line with SMSF property loans regulations.
What is the 5% SMSF rule?
This ATO rule limits the fund’s investment in related-party asset classes to no more than 5% of current assets. If breached, the fund must adjust the balance to stay compliant and avoid penalties that could impact benefits to fund members.
What type of loan is best for commercial property?
Commercial SMSF Property Loans with variable interest rates and structured loan agreements are often preferred, as they offer flexibility and access to competitive interest rates. It's best to compare comparison rate offers from potential lenders and seek financial advice before choosing.
How much deposit is required for SMSF property?
Most major banks and lenders ask for a deposit of 30%–40% of the property value, plus extra for application fees, legal costs, and possibly additional stamp duty. You’ll also need steady income or business income to meet the ongoing repayments.
Which banks will lend to SMSF?
Fewer major banks now offer SMSF property loans, but options still exist through select banks and non-bank potential lenders who specialise in SMSFs. Always check approval process timelines, formal loan approval conditions, and whether they support the types of properties you’re targeting.
Can my SMSF borrow money to buy property?
Yes, if the fund follows borrowing rules under SMSF professional guidance and has the borrowing powers defined in its trust deed. Lenders will assess your current balance, stable income, and fund structure before approving the loan.
Conclusion
Getting started with an SMSF commercial property loan in 2025 doesn’t have to feel overwhelming, especially with the right guidance. Whether you’re a business owner wanting to buy your own premises or an investor aiming to grow your super, the key is making informed decisions with support from professionals who know the rules.
At Zest Mortgage Solutions, our experienced mortgage brokers offer clear, no-pressure advice and a free consultation to help you work out what’s best for your fund. We’ve got offices in Ipswich and Springfield, and we proudly serve clients across Queensland, whether it’s for SMSF lending or home loans.
Call us on (07) 3461 6499 or visit zestmortgagesolutions.com.au to get started today.
