SMSF Commercial Property Refinancing for Business Owners
Business owners who use their SMSF to hold commercial premises — whether a warehouse, office, retail space, medical suite, or industrial unit — occupy a unique position in the SMSF lending market. The dual-purpose nature of the arrangement means that lenders and the ATO scrutinise the structure more closely.
Done correctly, it is a powerful strategy. Done carelessly, it creates compliance risk for both the fund and the business. Our brokers are experienced in navigating the specific requirements that apply to business owners refinancing commercial property within an SMSF.
The Critical Requirement: Arm's-Length Commercial Lease
If your business leases its premises from your SMSF, the lease must be on arm’s-length terms — meaning the rent must reflect genuine market value, the lease must be formally documented, and the arrangement must benefit the fund rather than the related party. The ATO actively reviews related-party commercial leases within SMSFs and has applied penalties in cases where rent was below market or undocumented.
Before any refinance proceeds, we confirm the lease documentation is in order. If adjustments are needed, we flag them to your SMSF accountant before the lender sees the application.
What Lenders Look for in SMSF Commercial Property
- A clean, documented lease agreement at market rent — or a vacancy with demonstrated rental demand
- LVR within the commercial SMSF cap (typically 80%)
- Evidence of consistent rental income flowing to the SMSF
- SMSF financial statements showing the fund can service the loan
- A trust deed that explicitly permits commercial property investment
- Fund liquidity meeting lender requirements (approximately 5% of loan amount for most lenders; higher for some)
General information only. SMSF commercial property lending is subject to individual lender criteria and ATO compliance requirements. Seek qualified accounting, legal, and financial advice before proceeding.
