What happened
Following a federal ban on entering into new limited recourse borrowing arrangements (LRBAs) to purchase residential real estate within self-managed super funds, industry experts report trustees are refocusing on commercial assets. Commercial properties offer five to 15-year leases, bank or personal guarantees, and tenant contributions to property outgoings.
Why it matters here
SMSFs require dependable income to maintain borrowing obligations and meet retirement payout goals. Commercial property allows business owners to hold qualifying commercial real estate inside their super fund and lease it back to their own business under strict arm's-length terms, maximising tax-effective retirement accumulation.
What to watch
Future regulatory guidance on sole purpose test compliance and upcoming commercial property auction clearance rate trends across suburban and regional markets.
Source
mortgagechoice.com.au