SMSF residential borrowing banned as property investors pivot to commercial real estate

Key points

• Self managed super funds can no longer enter new borrowing arrangements to buy residential property, following rule changes from August 10. Existing arrangements made before that date can still be refinanced.
• Funds may still buy residential property outright, or borrow to buy commercial property. Palise Property director Steve Palise says commercial property can offer tax advantages and higher income than residential.
• Mortgage broker Andrew Tan says SMSF lending is more complicated and costs more, with higher interest rates.