The 2026 SMSF borrowing changes
The Labor-Greens agreement included a ban on new SMSF limited recourse borrowing arrangements (LRBAs) for residential property. Current reporting indicates that commercial property borrowing is not the primary target of this ban.
Why commercial property is treated differently
SMSF borrowing rules have always treated residential and commercial property differently. The policy concern driving the residential ban relates to SMSFs competing with owner-occupiers and first home buyers in the residential housing market. Commercial property — such as a business premises purchased by a business owner's SMSF — does not raise the same policy concerns.
Business real property and the SMSF rules
One of the most common SMSF commercial property strategies involves a business owner purchasing the premises from which their business operates. This structure has specific rules under superannuation law — including that the lease must be at arm's length and on commercial terms.
What SMSF commercial property investors should do
- Confirm the final legislation once it is available — do not rely on media reporting alone.
- Seek specific advice from your SMSF adviser and accountant before signing any new contracts.
- Keep depreciation schedules and CGT cost base records for existing commercial property.
- Consider whether a commercial property report, depreciation schedule or insurance replacement cost assessment is needed.
How Koste can help
Koste prepares depreciation schedules, capital works records and CGT cost base reports for commercial properties held in SMSFs and other structures. These records ensure your accountant has the right figures when managing your SMSF reporting obligations.
For the full context of the 2026 Budget reforms, see our 2026 Property Tax Changes guide.