Last updated: July 2026
SMSF commercial property: the 9 August 2026 LRBA deadline
If you have been weighing whether your SMSF could borrow to buy commercial premises, there is now a date on the calendar that matters, and most of the coverage is pointing at the wrong part of it.
The residential borrowing ban is the headline, and commercial property is carved out of it. For business owners and their SMSFs, the two practical questions are which date binds you and what remains unresolved.
What actually happens on 9 and 10 August 2026?
The Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 received Royal Assent on 26 June 2026, and a 45-day commencement window runs from that date. The new rules commence on 10 August 2026. They prohibit SMSFs from entering new limited recourse borrowing arrangements (LRBAs) for residential property. The ban arrived as a condition of Greens Senate support for the capital gains tax and negative gearing changes in the same Bill, and it moved through the Senate at a pace that gave the industry very little warning.
The 9 August line is the one to hold onto. Transition protection for a residential arrangement turns on the date of the acquisition arrangement, which is contract exchange, not settlement. A residential LRBA where contracts are exchanged before commencement is protected even if the deal settles afterwards. Exchange on or before 9 August 2026, and you are inside the window. That is why buyers' agencies have reported phones running hot since the announcement, with clients compressing purchases into the legislated window.
I want to be upfront about the limits of that comfort. The exact timing on any arrangement close to the cutoff is a question for your solicitor, not something to eyeball off a headline.
Does the ban touch commercial property at all?
For commercial property, it does not. An SMSF can still enter a new LRBA to purchase commercial property after the new rules commence on 10 August 2026. The commencement date governs residential property. Commercial borrowing continues under the existing LRBA rules, and if you are mid-decision on a commercial purchase, 10 August is not a wall you are racing.
The most common application of this structure is the one where a business owner arranges for the SMSF to buy the premises the business trades from, and the business then leases those premises from the fund. Done correctly, that builds an asset inside superannuation rather than paying rent to a third party. It carries specific compliance requirements and it does not suit every situation, so treat that as a description of the structure, not a recommendation to use it.
So what is the question nobody has answered yet?
Here is where I would rather give you the honest position than a tidy one. The carve-out protects commercial property, often called business real property, but the operative test for what qualifies is the business real property test under section 66. As at the date of writing, the ATO has not published guidance on how the new rules interact with that test, and specialists working in this area do not yet have a clean answer on precisely which commercial premises qualify in every case.
In most cases, premises wholly and exclusively used in a business, that ambiguity is unlikely to change the answer. The grey lives at the edges: mixed-use property, premises with a residential component, or arrangements where the business use is partial. If your situation sits near one of those edges, the sensible move is to get the structural view confirmed before you commit, rather than assume the carve-out reaches your specific property.
What should you do before 10 August?
For a commercial purchase, the timeline is driven by readiness, not by the commencement date. The structural groundwork sits with your accountant, your licensed financial adviser, and a solicitor experienced in SMSF law: whether the fund is appropriately established, whether the trust deed permits borrowing, and how the bare trustee arrangement is set up. All of that needs to be in place before a purchase can proceed, and it takes longer than most people expect.
FGO's role starts once those structural decisions are made. We handle the finance and lending side, and we can tell you early whether the lending is likely to come together for the property and fund you have in mind, so you are not building a structure around finance that will not land. If you hold an existing residential LRBA and want certainty on the grandfathering, confirm your exchange date with your solicitor; where contracts exchanged before commencement, no action is required to keep that protection.
Frequently asked questions
You can. The ban applies to new limited recourse borrowing arrangements for residential property only. SMSF borrowing for commercial property remains available after the rules commence on 10 August 2026, under the existing LRBA rules. Whether an SMSF structure suits your circumstances is a question for your licensed financial adviser and accountant, and FGO handles the finance side once those decisions are made.
Exchange of contracts by 9 August 2026. Transition protection for a residential LRBA turns on the date of the acquisition arrangement, which is contract exchange, not settlement. An arrangement where contracts exchanged before the 10 August 2026 commencement is protected even if it settles later. Confirm the exact timing of your arrangement with your solicitor.
For premises wholly used in a business, the answer is very likely, but I would not tell you it is settled for every case. The qualification test is the business real property test under section 66, and the ATO has not yet published guidance on how the new rules apply to it. If your property has a mixed or residential component, confirm the structural position with your adviser and accountant before you commit.
This article is general information about a legislative change and the guidance FGO provides on finance and lending. It is not a recommendation to establish an SMSF or use any SMSF strategy. Whether an SMSF structure suits your circumstances is a question for a licensed financial adviser and your accountant.
For the companion explainer on how SMSF commercial property borrowing works after the ban, see Can You Still Borrow in an SMSF to Buy Commercial Property? For the broader picture on how we support commercial property purchases, read our approach to commercial finance.
Mid-decision on a commercial SMSF purchase?
If you are working through a commercial property purchase through your SMSF, book a 30-minute call and we will work through the finance side with you. Prefer to start in writing? Tell us about the property and the fund and we will come back to you.