SMSF commercial property loans: business real property, corporate trustee and bare trust

Last updated 6 November 2026 · Reviewed by 360 MMS Compliance

What is business real property, and what counts as commercial security?

In broad terms, business real property is land and buildings used wholly and exclusively in a business. It matters because super law treats it differently from residential property, including when the fund buys from a related party or leases the property to a member's business.

Commercial security is the property the loan is secured against. For an SMSF commercial loan, it's business real property such as:

• offices
• shops and other retail premises
• warehouses
• industrial premises.

Every property is subject to its valuation and lending criteria, and where it is also matters. Some specialised properties aren't accepted, so ask your broker to check the property before the fund signs anything. Residential property is different: our SMSF loans for residential property are refinance only, as explained below.

How does SMSF borrowing work?

An SMSF can only borrow under a limited recourse borrowing arrangement, often called an LRBA. The loan is used to buy a single asset, which is held in a separate trust outside the fund. If the loan isn't repaid, the lender's rights are limited to that asset, which helps protect the fund's other assets.

Members of the fund also give personal guarantees, which is an important part of the decision to borrow inside super.

Why a corporate trustee and a bare trust?

There are two separate companies involved:

• The SMSF's corporate trustee: a company that acts as trustee of the fund. Our SMSF loans are for funds with a corporate trustee only.
• The bare trustee: a separate company that holds the property on trust for the fund until the loan is repaid.

Your accountant or solicitor sets up the companies and the deeds.

How do I set up and apply, step by step?

Getting the order wrong can cause problems that are hard to fix after you've signed. For a commercial purchase, the steps are:

1. Get advice, then talk to your broker or our team. A licensed financial adviser or SMSF specialist accountant advises whether the fund should borrow. Your broker can then check the property and the fund against our criteria.
2. Check the fund's structure. Confirm the fund has a corporate trustee, and that its trust deed permits borrowing.
3. Set up the bare trust. The bare trustee company is set up before any contract is signed.
4. Sign the contract and pay the deposit. The bare trustee signs the contract, as trustee of the bare trust, and the deposit is paid from the SMSF's bank account.
5. Apply and be assessed. Apply through your broker or directly. Your broker will assess the fund's income and financial situation, and the fund, the security and the borrowers are assessed against lending criteria.
6. The offer and settlement. If the application is approved, members sign their guarantees after independent legal advice where relevant, and the purchase settles.

Can the fund buy premises from a member?

Business real property is one of the exceptions to the rule against an SMSF acquiring assets from related parties, so a fund can buy a member's business premises at market value. Where the member contributes their equity in specie as the deposit, extra steps and documents apply. Our guide to moving your business premises into your SMSF explains how that works.

What about residential property in an SMSF?

For residential property, our SMSF loans are now refinance only. Since 10 August 2026, purchases are only possible where the contract was exchanged before that date. Our SMSF loans guide explains the change and what it means for funds that already hold residential property.

What are the pros and cons of an SMSF commercial property loan?

Possible pros:

• The fund can buy business premises with borrowed money, not only cash it already holds.
• Your business may be able to lease the premises from the fund at market rent on commercial terms.
• Under a limited recourse arrangement, the lender's rights are limited to the property, which helps protect the fund's other assets.

Possible cons:

• Members guarantee the loan, so each could be personally liable if the fund doesn't repay.
• The structure needs extra companies and deeds, and it must be in place before the contract is signed.
• Much of the fund's savings can end up in one property, which can take time to sell.
• The rules for borrowing in super are strict, and mistakes can be hard to fix.

How can 360 MMS help?

360 MMS is a mortgage manager. Its home and commercial loans are funded by wholesale institutional funders and arranged through accredited mortgage brokers or directly. For an SMSF commercial property, we can help with:

• Purchases: SMSF loans for the fund to buy business real property, such as offices, shops, warehouses and industrial premises.
• Buying from a member: premises bought from a member at market value, with a licensed agent and an independent valuation, including in-specie deals.
• Refinancing: refinancing an existing SMSF commercial loan.
• The structure: what we need to see before the contract is signed, namely a corporate trustee, a deed that permits borrowing and a bare trustee company.
• Working together: we work with your SMSF accountant or licensed adviser and your broker.
• Getting started: apply through your accredited broker, or talk to our team directly.

Only a licensed financial adviser or SMSF specialist accountant can advise whether your fund should do this. Neither mortgage brokers nor our team give SMSF advice.

FAQs

Sources and further reading:ATO: SMSF borrowing restrictions (limited recourse borrowing arrangements) · ATO: Setting up an SMSF · Moneysmart: Self-managed super fund (SMSF)

General information only. It doesn't take into account your objectives, financial situation or needs, and it isn't credit, tax or legal advice. All loans are subject to lending criteria, and fees and charges apply. Kuone Pty Ltd T/As 360 MMS (ABN 81 621 683 672), Australian Credit Licence 504193.