First published on 4 November 2025, this article summarised a discussion with Jared Zac from Dott & Crossit about independent legal advice for SMSF property transactions. The embedded interview is retained as historical material. Use current rules and advice for a proposed transaction.
Before entering a limited recourse borrowing arrangement (LRBA), the ATO recommends advice from a qualified, licensed professional. The arrangement must comply with the applicable superannuation rules, the fund’s investment strategy and its trust deed. Ask the proposed lender whether it requires independent legal advice, who must receive it and what documentation it needs; do not assume every lender uses the same process.
The ATO explains that the SMSF trustee borrows to acquire an asset held in a separate holding trust, with the SMSF acquiring a beneficial interest and the right to legal ownership after repayment. Have your lawyer check the parties, trustee roles, documents and obligations for the proposed structure.
For real property, the rules effective from 10 August 2026 generally require new LRBAs to finance business real property: broadly, land and buildings used wholly and exclusively in a business. The legal use test matters, not simply a commercial label. Residential real property can qualify where it meets that test, and the property must remain eligible throughout the LRBA. See the ATO’s current guidance.
Borrowing arrangements and binding acquisition contracts entered into before 10 August 2026 may receive transitional treatment, including certain later refinances or settlements. Significant changes to an earlier contract can matter. Your legal adviser should check the dates and documents before you rely on an exception.
Legal advice helps you understand the documents and obligations; it is not a guarantee of compliance or lender approval. If you seek advice about fund strategy or suitability, use an appropriately licensed financial adviser. Take tax questions to an appropriately qualified tax adviser. Moneysmart’s SMSF guidance explains the importance of authorised financial advice and potential referral conflicts.
This article is educational. Flexdoc’s role is lending; we do not provide financial, legal, tax or superannuation advice. Obtain independent advice from appropriately qualified professionals before deciding to establish or use an SMSF or enter a property transaction.