After the 2026 SMSF residential borrowing ban, understanding your deposit requirements has changed significantly. For residential property, your SMSF now needs 100% of the purchase price in cash — there is no deposit concept when there is no borrowing. For commercial property, LRBA deposit requirements typically range from 20–35% of the purchase price. This guide explains what your fund needs and how to plan for it.
SMSF Deposit Requirements by Property Type in 2026
| Property Type | Borrowing Available? | Typical Deposit Required | Notes |
|---|---|---|---|
| Residential (established) | No — banned 2026 | 100% cash | Full purchase price must come from fund |
| Residential (new build / off-plan) | No — banned 2026 | 100% cash | Check if contract signed before ban commencement |
| Commercial (office) | Yes — LRBA available | 25–35% | Lender dependent; lower LVR than residential LRBA |
| Industrial (warehouse) | Yes — LRBA available | 25–35% | Strong lender appetite in 2026 |
| Retail (shops) | Yes — LRBA available | 30–40% | Higher deposit due to perceived retail risk |
| Medical / healthcare | Yes — LRBA available | 25–30% | Favoured by lenders — long leases, stable tenants |
How Much Does My SMSF Need Saved Before Buying Commercial Property?
For a commercial property purchase of $1,000,000 using an LRBA, your SMSF typically needs $250,000–$350,000 as a deposit (25–35%), plus an additional $50,000–$70,000 in transaction costs (stamp duty, legal, inspection). In total, plan for $300,000–$420,000 in accessible fund cash before committing to a $1m commercial purchase.
Frequently Asked Questions
Can my SMSF use a guarantor to reduce the deposit for commercial property?
No. SMSF LRBAs do not permit personal guarantees from members in most circumstances. The loan must be structured as a limited recourse arrangement where the lender’s recourse is limited to the asset purchased.
What happens to the deposit if the SMSF deal falls through?
If an SMSF property purchase falls through during the cooling-off period, standard deposit rules apply and the fund may recover the deposit less any applicable penalty. Outside cooling-off, the vendor may be entitled to retain the deposit. SMSF trustees must treat this the same as any commercial property transaction.
Does my SMSF need cash reserves after the deposit?
Yes. Most SMSF specialists recommend retaining a cash buffer of at least 5–10% of the property value within the fund after settlement to cover ongoing expenses, rates, insurance, maintenance, and any periods of vacancy — particularly for commercial property.
Whether you’re buying your first investment property, building a portfolio, or exploring SMSF property investment, the Collings Property Platform gives you access to off-market opportunities, portfolio tracking, investment tools, and property insights powered by GeeVee AI. Join free today and start building your property future. collings.com.au/portal
Find your next property with Collings
Track suburbs, get matched to on-market and off-market listings, and manage your whole property search in one place. Access the Collings property portal.
