If you have ever thought about buying property through a self-managed super fund (SMSF), the change is simpler than it sounds.
Since 10 August 2026, a self-managed super fund can no longer borrow to buy a residential investment property. However, borrowing to buy commercial property is still on the table, provided the property qualifies.
What’s affected
If your fund already has a loan on a residential property, nothing needs to happen. Existing arrangements continue, and they can generally still be refinanced.
If you signed a contract before 10 August, that purchase is generally still protected, even if it settles later.
And a fund can still buy residential property outright, using its own cash rather than borrowed money.
Why some investors look at commercial anyway
Commercial has always been a different proposition to residential, and for some investors the appeal has little to do with super rules.
Leases tend to run longer, which can give you better visibility over future income. Depending on the lease, tenants may also contribute to outgoings like rates, insurance, land tax or maintenance. Yields can be stronger, though that varies a lot by asset.
The trade-offs are real too. A vacant commercial property can take longer to lease, demand shifts between sectors and locations, and some assets need more hands-on management, which is really just to say that what you buy matters more here than almost anywhere else.
‘Commercial’ and ‘qualifying’ are not the same thing
This is the part that catches people out. The rules do not simply say commercial; they use a specific term, ‘business real property‘, which broadly means land and buildings used wholly and exclusively in a business.
Offices, warehouses, industrial premises, medical suites and retail can all potentially fit. But it turns on how the property is used rather than how it is zoned or what it was built as, so it is worth checking rather than assuming.
Where that leaves you
None of this makes commercial property right for everyone, and the availability of borrowing is not, on its own, a reason to do anything.
What it does do is draw a clearer line. If borrowing is part of your thinking, commercial is now the side of that line where it is still possible.
The fundamentals remain the same: Location, tenant demand, lease quality, condition, income, future spend and who might buy it from you later all still decide whether something is worth owning. An industrial shed in greater Launceston is a very different prospect to a Hobart office space or a regional retail shop.
If commercial property is something you are weighing up, our Commercial team is happy to talk through what is happening in the market and what might suit what you are trying to do.
This is general property information only and is not financial, taxation, superannuation or legal advice. The rules here are technical, so please get advice from an appropriately qualified professional about your own situation.
