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SMSF loans sit at the intersection of property, superannuation law, and lending, which means there is a lot to understand before you act. At Zella Money, we work with clients who are seriously considering using their Self-Managed Super Fund to buy property, and we help them understand exactly what is involved from a lending perspective.
The legislative framework
Borrowing inside super is not straightforward. Under the Superannuation Industry (Supervision) Act 1993, superannuation funds are generally prohibited from borrowing money. The exception is a Limited Recourse Borrowing Arrangement, commonly called an LRBA. Under an LRBA, the property is held in a separate bare trust while the loan is being repaid. Your SMSF holds the beneficial interest in the asset and takes legal ownership once the loan is fully repaid. If the loan defaults, the lender's recourse is limited to the asset held in the bare trust, which means your other SMSF assets are protected. This limited recourse structure is what makes SMSF borrowing possible, and it is also what makes it more complex than a standard investment loan.
The 2026 residential property ban
This is the most important update you need to know about right now. The Treasury Laws Amendment (Tax Reform No. 1) Act 2026 received Royal Assent on 26 June 2026. From approximately 10 August 2026, new LRBAs can only be used to acquire business real property. Residential property no longer qualifies for new SMSF property loan arrangements under an LRBA. This applies to all residential property, whether newly built or existing.
If you already have an LRBA over a residential property that was entered into before the commencement date, your arrangement is grandfathered. The key date is contract exchange, not settlement. A contract exchanged before the operative date is protected even if settlement occurs after the ban takes effect. If you are in this situation, no action is required to maintain your grandfathered status, though you should speak with a licensed SMSF specialist to confirm your position.
SMSFs can still acquire residential property using existing fund assets without borrowing, provided the property is not acquired from a related party and is not occupied by a fund member or a related party of a member.
SMSF commercial loans
For commercial property that satisfies the definition of business real property under section 66 of the SIS Act, LRBAs remain fully available. Business real property means land and buildings used wholly and exclusively in one or more businesses. This is where the SMSF commercial loan continues to be a genuinely useful structure, particularly for business owners who want their SMSF to own the premises from which their business operates.
One of the practical advantages here is that business real property leased between the fund and a related party is excluded from the in-house asset rules, provided the lease is on arm's length terms at market value. This creates a structure where a business owner pays rent to their own super fund, which can be a tax-effective approach when set up correctly. Zella Money can help you understand the lending side of this structure, though the SMSF sole purpose test and compliance obligations sit with your SMSF specialist and accountant.
It is worth noting that borrowed funds cannot be used to improve an existing asset under an LRBA. The SMSF loan must relate to a single acquirable asset, and multiple properties on separate titles cannot be bundled into a single LRBA.
SMSF loan interest rates and deposit requirements
SMSF loan interest rates are typically higher than standard investment lending rates, and SMSF loan LVR limits are generally more conservative. Most lenders in this space require a minimum deposit of around 30 percent for residential property (where grandfathered arrangements still apply) and similar or slightly lower for commercial. The SMSF variable rate and SMSF fixed rate options available will depend on the lender and the nature of the property. Zella Money works across a panel of lenders to help you compare SMSF lenders and understand what each is actually offering.
The ATO also publishes safe harbour interest rates under PCG 2016/5 for related party loans. If your LRBA is not on arm's length terms, the income from the arrangement could be assessed as non-arm's length income and taxed at the highest marginal rate, which would significantly affect the tax efficiency of the structure.
Division 296 tax and contributions caps
From 1 July 2026, members with a total superannuation balance above $3 million will be subject to Division 296 tax of 15 percent on the proportion of earnings attributable to the amount above that threshold. Outstanding LRBA amounts entered into on or after 1 July 2018 are included in a member's total superannuation balance in certain circumstances. This is relevant to SMSF borrowing capacity assessments and to the overall tax position of the fund. The concessional contributions cap is now $32,500 per annum, and the non-concessional contributions cap is $130,000 per annum. These figures affect how quickly members can build fund assets to support an SMSF mortgage.
SMSF loan refinancing
If you have an existing residential LRBA, refinancing is still permitted under the 2026 legislation. The prohibition does not apply to maintaining or refinancing a borrowing under an arrangement entered into before the commencement date. However, the ATO had not published updated guidance on all aspects of this as at 2 July 2026, and the existing position is that a significant change to the terms or conditions of an LRBA can end the arrangement and create a new one. If you are considering an SMSF loan refinance, getting specialist advice before making any changes is essential.
For commercial LRBAs, refinancing is not affected by the 2026 residential ban. The refinanced loan must relate to the same single acquirable asset, maintain the limited recourse character of the original arrangement, and meet arm's length terms consistent with PCG 2016/5.
How Zella Money can help
Zella Money works with clients who are using super to buy investment property or commercial premises through an SMSF loan application. Our role is on the lending side: helping you understand your SMSF borrowing capacity, identifying which lenders are appropriate for your situation, and managing the loan process. We work alongside your SMSF specialist, accountant, and solicitor, because getting this right requires the whole team.
The rules around SMSF loans have changed significantly, and they will likely continue to evolve. The information on this page reflects the law as at 2 July 2026. It is not financial or legal advice, and it does not account for your personal circumstances. Please speak with a licensed SMSF specialist before acting on anything here. If you are ready to talk through the lending side, Zella Money is here for that conversation.
Getting a home loan can feel overwhelming. It doesn't have to be. At Zella Money, we've built a process that keeps you informed, supported, and confident at every step. Here's how we work together.
Let's Have a Chat: Everything starts with a conversation. We take the time to understand where you are right now, where you want to go, and what matters most to you. No pressure, no jargon. Just an honest discussion about your situation and your goals.
We Dig Into the Detail: Once we know what you're working towards, we take a closer look at your finances. Income, expenses, savings, existing debts. We look at the full picture so we can give you advice that's actually relevant to your life, not just a generic answer.
We Research the Market: With a clear picture of your situation, we search across a wide panel of lenders to find options that genuinely suit you. We're not tied to one bank or one product. Our job is to find the right fit, not the easiest one.
We Walk You Through Your Options: We present a shortlist of suitable loan options and explain each one in plain language. Rates, fees, features, flexibility. We cover it all so you can make a decision you feel good about. No hard sell, ever.
We Handle the Application: Once you've chosen the loan that works for you, we take care of the paperwork. We prepare and lodge your application, liaise with the lender, and keep things moving. You don't need to chase anyone.
We Keep You in the Loop: From application through to approval, we stay in regular contact. You'll always know where things stand. If the lender needs anything extra, we handle it quickly and let you know what's happening and why.
Settlement and Beyond: Approved and settled? We're still here. We check in after settlement to make sure everything's running smoothly, and we stay available as your circumstances change. One loan is just the beginning.
Ready to talk to the team? We're excited to meet you! Shoot though an enquiry and we'll get back to you ASAP!
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We used Jaclyn the Senior Finance Broker to buy our first home and she was amazing! She is so knowledgeable, made us feel valued and turned our dream into a reality. Can not recommend her enough! Shout out to Sal as well the Settlements Manager who helped make settlement nice and simple.
Chris Fallon
I cannot recommend Zella highly enough! Charlotte and the wider Zella team were with us every step of the way! They truly had our backs in securing the best home loan for our family. Prompt, informative and easy to deal with! Thank you so much for all your hard work!! xx
Olivia Jolliffe
I had a great experience with Zella from start to finish. The team was friendly and made our refinance super easy. Highly recommend!
Casey Sharrock
Huge thanks to Tara and her team! Highly recommend !
Maddie B
Bought my first home through Zella and so so glad I did! Georgia was extremely helpful from the start and patient with answering all of my stupid questions. Thank you again for everything!
Christine Untario
I really appreciated working with the team. They were really efficient, no question went unanswered and they were lovely to work with. I felt in good hands!
Jane Eldershaw
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For most standard lending appointments, no. We're paid by the lender once your loan settles. In rare cases where applications are highly complex, a fee may apply, but we'll always discuss and disclose this with you upfront.
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Absolutely. We assist clients across Australia and have a thorough understanding of different state and territory regulations, grants and incentives.
We keep communication clear and simple. Your broker will be available via email and phone, and we manage documentation securely through our electronic portal. Your initial meeting can be held over the phone or by video call, depending on your preference. We're always just a message away if you need support.
To get started, we'll need documents such as identification, proof of income (like payslips or tax returns), details of your assets and liabilities, and statements for any existing loans or credit facilities. Your broker will give you a personalised checklist so you always know what's needed.
Your borrowing capacity depends on factors like your income, expenses, existing debts, credit history and the policies of individual lenders. We'll work with you to assess your position and give you a clear understanding of what's achievable.
Yes. Our brokers stay across all available incentives, including first home buyer grants, stamp duty concessions and guarantee schemes. If you're eligible, we'll help you understand how to apply and make the most of these opportunities.
Absolutely. We specialise in guiding first-home buyers through the process with tailored advice, clear communication and plenty of support along the way.
Banks offer their own products. We offer you options. As your broker, we take the time to understand your goals and financial circumstances before searching across a broad panel of lenders to find solutions that genuinely suit you. We also stay across the latest policies, grants and niche lender options that could make a real difference to your outcome.
We conduct a credit check early in the process to help us best assist you. Your score is safe with us. If you have any concerns about your credit history, please speak with your broker — we're here to support you.
Pre-approvals generally last between three and six months, depending on the lender. We'll guide you through the timeline and help you refresh your approval if your property search takes a little longer than expected.
Once your loan is formally approved, we'll guide you through the settlement process. We work closely with your solicitor or conveyancer to ensure all requirements are met and everything runs smoothly right through to settlement day.
Definitely. We understand the nuances of self-employed income and have extensive experience presenting applications for business owners in a way that resonates with lenders.
No. In addition to home loans, we also assist with commercial lending, investment loans, refinancing and asset finance. Whatever your finance goals, we're ready to support you.
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