What type of property can't be acceptable for an SMSF loan?

Below are not acceptable for an SMSF:

• Vacant land

• Owner occupied (or member occupied) residential property

• Construction or Refurbishment/ Improvement loans

• Cash Out

• Acquisition of residential property from a related party

Personal Use Property: SMSFs cannot use LRBAs to purchase assets for personal use, such as holiday homes, art, or other collectibles, as these do not meet the sole purpose test of providing retirement benefits. The sole purpose test requires that an SMSFs investments and assets can only be for the sole purpose of growing the client’s retirement savings, not for current use.

Improvement of Existing Property: SMSF borrowing cannot be used to improve or significantly alter an asset. Funds can only be used to maintain the asset, not to develop or improve it – no construction loans for SMSFs.