If you're an SMSF trustee who's been watching the lending landscape shift, you've probably already heard that the rules changed in August 2026. What you may not have heard yet is what that actually leaves on the table, and there's more than most trustees realise.

The ban on new residential Limited Recourse Borrowing Arrangements closed one door, but the doors that remain open cover a meaningful range of situations: refinancing an existing residential LRBA to a better rate or a different lender, buying business real property through the fund, and holding residential property purchased with cash. For trustees at or near retirement, those pathways can still do significant work.

Our team helps SMSF trustees and their advisers across Logan, QLD structure the lending side of these decisions, comparing across 60+ lenders. The SMSF lending side of it is where most of the difference is made, because the panel of lenders willing to write SMSF finance is narrow and the policy differences between them are wide.

What can SMSF trustees in Logan, QLD still borrow for?

The short answer is more than the headlines suggest. The Treasury Laws Amendment (Tax Reform No. 1) Act 2026 banned new LRBAs to acquire residential property, effective 10 August 2026. It did not touch existing arrangements, did not restrict commercial property borrowing, and did not prevent funds from holding residential property purchased outright with cash.

Three pathways remain clearly open. Refinancing an existing residential LRBA is permitted, including switching to a different lender entirely. Business real property, meaning commercial premises used wholly and exclusively in a business, is unaffected by the ban. And residential property acquired inside the fund using the fund's own money, without borrowing, was never governed by LRBA rules at all.

How do lenders assess an SMSF loan application?

SMSF lending sits in a specialist category and lenders assess it differently from personal lending. The major banks largely exited this market in 2018 and 2019, so you're dealing with a panel of specialist and second-tier lenders, each with their own policy around fund size, liquidity, LVR and income evidence.

What lenders typically want to see:

• › Minimum fund balance: most lenders require between $200,000 and $300,000 in the fund before they'll consider an application.
• › Post-settlement liquidity: the fund must retain roughly 10% of the loan amount, or 5% to 10% of the asset value, in liquid assets after settlement.
• › Rental income treatment: lenders shade rental income to 70% to 80% of gross when assessing serviceability inside the fund.
• › Bare trust structure: the loan must sit in a Limited Recourse Borrowing Arrangement with a bare trust under the SIS Act 1993. The fund holds the beneficial interest; the bare trustee holds legal title until the loan is repaid.
• › Sole purpose test: the property cannot be lived in or rented to a fund member or related party, at any point.

What are the LVR and cost conditions for SMSF lending?

SMSF lending carries materially different conditions from standard residential or investment loans. LVRs are lower, rates are higher, and the acceptable uses of the loan are strictly defined.

The options worth weighing:

• › Refinancing an existing residential LRBA: LVR 65% to 80% · permitted under the new law · can switch lenders · rate premium over standard investment loans roughly 1% to 2%
• › New commercial / business real property LRBA: LVR 60% to 70% · unaffected by the ban · property used wholly in a business · assessed on property income and fund serviceability
• › Residential purchase with fund cash (no borrowing): no LVR · no LRBA required · sole purpose test still applies · no lender needed

The LVR difference between residential refinance and commercial purchase matters. A commercial property at 65% LVR requires a significantly larger fund contribution than a residential refinance at 80%, and lenders assess commercial primarily on the property's income and the remaining lease term, not just the fund's own servicing position.

Get in touch Need help with SMSF lending? We're a local team who understand how lenders actually assess your situation, not just your rate. We'll compare your options across 60+ lenders to find the right fit. Chat to Our Team Call 1800 774 756

What does the SMSF residential borrowing ban actually change?

From 10 August 2026, an SMSF cannot enter a new LRBA to acquire residential property. That applies to any contract entered into on or after that date, with transitional protection available only where a binding contract was already in place before 10 August 2026.

What it does not change is equally important. Existing residential LRBAs are fully grandfathered, with no forced sale, no LVR reset, and no compliance requirement beyond what already applied. Refinancing an existing residential LRBA to a different lender or a better structure is explicitly still permitted. The ban touches only new acquisitions.

For CGT, the existing rules still apply to assets held inside an SMSF. The broader CGT changes legislated in the same Act, including the replacement of the 50% discount with indexation and a 30% minimum tax, commence 1 July 2027 and apply to individuals, trusts and partnerships. SMSF trustees should confirm with their accountant and SMSF adviser how those changes interact with their fund's specific position, which is a tax and superannuation question, not a lending one.

When does SMSF borrowing not make sense?

The structure is more complex and more expensive than personal investment lending, and the compliance obligations extend well beyond the loan itself. For a fund with a modest balance approaching a single asset that would dominate the fund's portfolio, the diversification risk alone can make borrowing the wrong move even where the numbers stack up on paper.

Borrowing to acquire commercial property through an SMSF makes most sense where the property is genuinely used in the member's business, where the fund has sufficient scale to absorb the liquidity conditions after settlement, and where the member has enough years before retirement to allow the loan to run its intended term. A trustee within ten years of accessing benefits who is carrying a significant LRBA balance should be weighing this with their SMSF adviser, not just their lender.

How do mortgage brokers help SMSF trustees in Logan, QLD?

The lender choice is the outcome here. Three policy differences move the result for SMSF trustees, and they're not published side by side anywhere.

• › Minimum fund balance: some lenders set the floor at $200,000, others at $300,000 or above. A fund below one threshold may still qualify at another lender.
• › LVR on commercial property: the range across the specialist panel is 60% to 70%, and that 10-percentage-point difference can determine whether the fund has sufficient capital to proceed at all.
• › Liquidity buffer calculation: lenders differ on whether the buffer is assessed against the loan amount or the property value, and some allow a portion of the property's own rental income to partially satisfy it.

Whether those differences matter to your fund depends on which lenders your broker has access to and on your fund's specific circumstances, which is worth a conversation before any application is lodged.

What approval challenges do SMSF trustees face?

Common hurdles and how they're managed:

• › Bare trust documentation: the LRBA structure requires a bare trust deed, a separate trustee, and loan documents in the correct name. Lenders review these before approval and an error in the structure is a harder fix than a standard loan document issue.
• › Liquidity shortfall post-settlement: trustees sometimes underestimate how much liquid capital the fund needs to retain after settlement. A fund that just meets the balance threshold can fail the liquidity test at the same time.
• › Related-party rental: a property inside the fund that has ever been used by a member or related party creates a sole-purpose-test issue that some lenders will not look past, regardless of the current arrangement.
• › Valuation and security acceptance: SMSF lenders are more selective about security types than residential lenders. Specialised commercial properties, rural properties, and properties above certain loan amounts may fall outside a lender's acceptable security list entirely.

Source: Australian Taxation Office (SMSF lending mechanics and sole purpose test); APRA (lender serviceability guidelines).

Frequently Asked Questions

Can an SMSF still borrow to buy residential property after August 2026?

No, not through a new LRBA. New Limited Recourse Borrowing Arrangements to acquire residential property are banned from 10 August 2026. Contracts signed before that date with an existing LRBA are grandfathered and fully unaffected.

Can I refinance my existing SMSF residential loan to a different lender?

Yes. Refinancing an existing residential LRBA to a different lender is explicitly permitted under the new law. The ban applies only to new acquisitions, not to restructuring or refinancing an arrangement already in place.

What LVR can an SMSF get on a commercial property loan?

Commercial property through an SMSF typically reaches 60% to 70% LVR across the specialist lender panel. The exact figure depends on the property type, the lender, and the fund's balance and liquidity position.

Is it better for an SMSF to borrow or buy with fund cash?

Buying with fund cash avoids the LRBA structure and its compliance obligations entirely. Borrowing amplifies the fund's property exposure and keeps more cash invested elsewhere. The right approach depends on the fund's scale, investment strategy and retirement timeframe, which is an SMSF adviser question, not a lending one.

Does the new CGT change affect SMSF property?

The 50% CGT discount change legislated in June 2026 applies to individuals, trusts and partnerships from 1 July 2027. SMSFs are not included in that change. Confirm the fund's specific CGT position with your accountant.

Should SMSF trustees use a mortgage broker or go directly to a lender?

A mortgage broker, every time. The SMSF lender panel is narrow and specialist, policies differ sharply between lenders on fund balance, LVR and liquidity conditions, and applying to the wrong lender leaves an enquiry on the fund's credit file for five years.

Your Next Steps

Getting SMSF lending right as a trustee means understanding exactly which doors the August 2026 changes closed and which remain open, and then finding the lender whose policy actually fits your fund's position. The lender differences on fund balance, LVR and liquidity buffer are the decisions that matter, and they're not visible until you're comparing across the specialist panel.

Ready to find out which lenders will work best for your SMSF lending situation? Contact the Cube Loans team or call 1800 774 756. We'll canvas our 60+ lender panel and find the most suitable options for your circumstances. We always recommend working through the lending side alongside your SMSF adviser and accountant, so the structure is right from the start.

About the author Nevada Matthews Mortgage Broker and Co-Owner, Cube Loans Nevada Matthews is a mortgage broker and co-owner of Cube Loans, helping first home buyers, investors and business owners across Loganholme and the wider Logan region. He started broking in 2019 and was named New Broker of the Year (QLD) in 2023, and operates under Cube Central Pty Ltd (Credit Representative 472851), authorised under Australian Credit Licence 517192. Meet Nevada → LinkedIn

Cube Loans, Loganholme and Logan, QLD, Cube Central Pty Ltd, Credit Representative 472851, authorised under Australian Credit Licence 517192, General information only - this article does not constitute financial advice. Please consider your own circumstances and seek professional advice before making any financial decisions.