SMSF

How much deposit do you need for an SMSF property loan?

How the 10 August 2026 LRBA changes affect eligible property and the cash an SMSF may need.

Short answer

For a new LRBA entered into from 10 August 2026, real property must be business real property at that time. This generally rules out a new LRBA for ordinary residential investment property. For eligible commercial property, the deposit is lender-specific and often starts around 30%, with additional money needed for costs and liquidity.

Budget beyond the deposit

An eligible SMSF commercial-property purchase can involve stamp duty, GST considerations, legal advice, conveyancing, valuation, lender fees and the cost of establishing or reviewing the limited recourse borrowing arrangement and holding trust.

Maximum LVR depends on lender and property type.
The property must satisfy the current business-real-property rules.
Rent and member contributions must support repayments.
Some lenders require a minimum liquid balance after settlement.

Get the structure right before signing

SMSF borrowing is generally completed through a limited recourse borrowing arrangement. Contract names, trustee structure, related-party use and the holding trust must be handled correctly. Obtain qualified legal, tax and financial advice before committing to a property.

The rules changed in August 2026

The ATO states that an LRBA entered into on or after 10 August 2026 can acquire real property only when it is business real property at the time the arrangement begins. In broad terms, the property must be used wholly and exclusively in one or more businesses, subject to the detailed superannuation rules. Residential property held only for rent will generally not meet that test. Older arrangements may have transitional treatment, so do not assume the new rule applies identically to an existing LRBA.

How to estimate the cash requirement

If an eligible property costs $1 million and the lender permits a 70% LVR, the starting deposit is $300,000. The fund then needs money for duty, legal work, valuation, lender charges and any GST timing issue. The lender may also require a liquidity reserve after settlement. A specialised property, short lease, regional location or limited tenant market can reduce the maximum LVR and increase the required contribution. Obtain a property-specific assessment rather than relying on a residential LVR.

Related-party occupancy needs careful advice

Business real property can sometimes be leased to a related operating business on arm's-length terms, but the property and arrangement must comply with superannuation law. The lease, rent, expenses and payments should be properly documented and conducted commercially. Borrowing rules, acquisition rules and the sole-purpose test all need consideration. A lender approval does not confirm legal or tax compliance, so have the SMSF deed, contract and LRBA structure reviewed before signing anything binding.

Questions to ask before you proceed

Does the property satisfy the LRBA rules applying from 10 August 2026?
How much cash is required for the deposit, acquisition costs and post-settlement liquidity?
Which legal, tax and financial advisers must review the structure before the contract is signed?

Key takeaway

Plan for the deposit, all acquisition and structure costs, plus a genuine post-settlement cash buffer.

Official guidance: ATO: Changes to limited recourse borrowing arrangements

This is general information, not personal financial, tax or legal advice. Lending criteria, fees and eligibility vary.

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