After the 2026 SMSF residential borrowing ban, the question every SMSF trustee is asking is simple: what can my fund actually afford to buy now? This guide breaks down SMSF property affordability by fund size, property type, and investment strategy — so you can make a confident, compliant decision.
How Do I Work Out What My SMSF Can Afford?
SMSF property affordability is calculated differently from personal property purchases. Your fund cannot borrow for residential property, so your affordable residential price is your available cash allocation. For commercial property, borrowing via LRBA may still be available, which significantly increases your purchasing power.
SMSF Affordability by Fund Size and Property Type
| Fund Balance | Max Residential (Cash Only) | Max Commercial (With LRBA 70% LVR) | Recommended Approach |
|---|---|---|---|
| $200,000 | $120,000 | $400,000 | Unlisted trust or small commercial strata |
| $400,000 | $240,000 | $800,000 | Commercial strata with LRBA |
| $600,000 | $360,000 | $1,200,000 | Industrial unit or small office with LRBA |
| $800,000 | $480,000 | $1,600,000 | Warehouse, medical or retail with LRBA |
| $1,200,000 | $720,000 | $2,400,000 | Direct commercial or business premises |
| $2,000,000+ | $1,200,000+ | $4,000,000+ | Portfolio — direct plus trusts |
What Costs Should My SMSF Budget For Beyond the Purchase Price?
SMSF property purchases involve stamp duty, legal and conveyancing fees, building and pest inspection costs, property management fees, ongoing maintenance, and insurance. As a guide, allow 5–7% of the purchase price for transaction costs on top of the property price itself.
Frequently Asked Questions
Does my SMSF need a minimum balance to buy property?
Most specialists recommend a minimum of $200,000–$300,000 for any direct property investment, and $500,000 or more if using an LRBA for commercial property. Below these thresholds, indirect exposure via unlisted property trusts is more cost-effective.
Can my SMSF afford residential property without borrowing?
Yes — if your fund has sufficient cash. A fund with $800,000 could allocate up to $480,000 to a residential property purchased outright in cash, subject to your investment strategy and diversification obligations. However, most residential property in major cities exceeds this threshold, making commercial property a more accessible option for many SMSF funds.
What is the cheapest way for my SMSF to get property exposure?
Unlisted property trusts and Australian Real Estate Investment Trusts (A-REITs) allow SMSF funds to gain property exposure from as little as $10,000 — without the transaction costs, management obligations, or compliance burden of direct ownership.
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