​SMSF Lending Has Changed – But Opportunities Still Exist

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The rules around borrowing through a Self-Managed Super Fund (SMSF) have changed significantly.

Under the Federal Government's new legislation, SMSFs can no longer establish new Limited Recourse Borrowing Arrangements (LRBAs) to purchase residential property. Existing residential borrowing arrangements are protected under grandfathering provisions, and commercial property lending through an SMSF remains available where the property qualifies as Business Real Property.

While these changes have closed one investment strategy, they have also made it more important than ever to understand the opportunities that still exist.

At Brunyah Property Finance, we specialise in helping SMSF trustees understand their lending options and navigate this changing environment with confidence.

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Already Own a Residential Property in Your SMSF?

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You may still be able to refinance.

One of the biggest misconceptions following the Government's announcement is that existing SMSF loans can't be changed.

If your residential investment property was purchased under an existing Limited Recourse Borrowing Arrangement before the new rules came into effect, your loan may continue under the grandfathering provisions. In many cases, refinancing may still be possible, depending on your circumstances and the lender's policy.

Whether your current loan has a high interest rate, restrictive features or no longer suits your retirement strategy, refinancing could help improve your SMSF's long-term position.

Because the legislation is new and lender policies continue to evolve, obtaining advice before refinancing is essential.

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Why Refinance an SMSF Loan?

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Just because your SMSF property loan is older doesn't mean it should stay the same forever.

Refinancing may allow you to:

• reduce your interest rate

• lower your ongoing repayments

• improve your SMSF's cash flow

• access more flexible loan features (where available)

• move to a lender better suited to your long-term strategy

• review your investment structure as your super balance grows

Every SMSF is different, so we'll assess whether refinancing genuinely delivers a benefit rather than simply changing lenders.

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Commercial Property Lending Is Still Available

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While residential borrowing has changed, commercial property purchased under the correct structure continues to be eligible for SMSF borrowing.

For many Australians, this may become an even more attractive strategy.

Commercial property owned within an SMSF can provide:

• long-term rental income for your retirement

• potential capital growth

• greater control over your business premises

• tax-effective wealth creation within super

Many business owners choose to purchase the premises their business operates from inside their SMSF. The business then leases the property from the SMSF at market rent, helping build retirement wealth while providing security over the location of the business. Business real property continues to qualify for SMSF borrowing under the new rules.

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Is Commercial Property Right for Your SMSF?

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Commercial property isn't suitable for every investor, but it can be an excellent strategy when:

• you own an established business

• your business leases commercial premises

• your SMSF has sufficient contributions and cash flow

• you're focused on building long-term retirement wealth

• you're looking for greater control over your business premises

Every strategy should be considered alongside your accountant and financial adviser to ensure it aligns with your SMSF's investment strategy and compliance obligations.

 

How Brunyah Can Help

SMSF lending has always been one of the more specialised areas of mortgage broking—and it's become even more so following the recent legislative changes.

Whether you're:

• refinancing an existing residential SMSF loan

• purchasing commercial property through your SMSF

• reviewing your current lending structure

• wanting to understand how the new rules affect you

I'll work closely with your accountant, financial adviser and solicitor to help you find a lending solution that supports your long-term retirement goals.