Investors are leaving property for super. Here’s what business owners should do instead.
The tax case for super after the 2026 budget is real, and the surge in contributions is a rational response to it. For a business owner it is also incomplete, because money in super cannot fund your business and cannot secure a loan. The right order for the next dollar is business capital first, borrowing capacity second, super third.
I have worked with more than 500 business-owner clients since 2011 and settled over $1.5 billion in lending. The pattern forming now is one I have seen in smaller versions before: a tax change moves money into a locked structure, and 12 to 18 months later some of those owners are funding a shortfall with the most expensive debt on the market.
Why everyone is suddenly contributing to super
The 2026 federal budget did two things to property investors. From July 2027, negative gearing is restricted to new builds. The 50 per cent capital gains tax discount has been replaced by inflation indexation of the cost base and a minimum tax rate of 30 per cent on the gain. Super was left largely untouched, with one exception: from 10 August 2026, an SMSF can no longer borrow to buy residential property.
Money moved quickly. AustralianSuper and MLC have both reported voluntary contributions up about 35 per cent, most of it from members aged 50 to 66. New investor lending fell 8.6 per cent in the June 2026 quarter. Super assets reached $4.8 trillion at June 2026. From 1 July 2026 the concessional cap is $32,500 and the non-concessional cap is $130,000, with a $390,000 bring-forward for those who qualify.
The driver is the tax gap. Inside super, income is taxed at 15 per cent and gains on assets held more than 12 months are effectively taxed at 10 per cent. Outside super, a top-rate taxpayer now pays at least 30 per cent on a gain and often more.
Take a $500,000 gain on an asset held for several years, and assume $100,000 of that gain is removed by indexation for inflation over the holding period. Inside super the tax is roughly $50,000. Outside super the taxable gain is $400,000, which is $120,000 at the 30 per cent minimum and $188,000 at a 47 per cent marginal rate including the Medicare levy. The gap is $70,000 to $138,000 on one transaction. Those figures are illustrative and depend on your cost base, holding period and marginal rate, but the direction is not in doubt.
Two points remain unsettled at the time of writing. Whether investment properties bought before the change are grandfathered for negative gearing, and how far the small business CGT concessions still shield the proceeds of a business sale under the new rules, both need to be checked with your accountant against the final legislation rather than assumed from the announcement.
What the super funds are not telling business owners
Two facts sit outside every contribution calculator.
Super is locked until preservation age, which is 60 for most people still working today, and in most cases until you also retire. Money you contribute this year is unavailable to you for as long as it takes to get there, whatever your business needs in between.
Super has zero value as loan security. This is the point that matters most to the people I work with. Take $200,000 of equity held in your own name or inside your business. Against residential property at an 80 per cent loan-to-value ratio it supports around $1 million of purchase. Against commercial property or business assets it supports $800,000 or so. Move the same $200,000 into super and it supports nothing. None of the up to 70 residential lenders on our panel will treat a super balance as security. Nor will any of the 15 to 20 specialist and commercial lenders we work with.
The most expensive mistake I see follows directly from that. An owner makes a large non-concessional contribution for the tax outcome. Eighteen months later the business needs $150,000 for a stock build, a tax bill, an equipment replacement or a slow-paying debtor. The equity that would have secured a facility at a property-secured rate is gone. What is left is unsecured business lending at roughly double or triple that rate, repaid over months rather than years, with a personal guarantee attached. The tax saved on the contribution is often consumed by the interest on the shortfall.
A decision order for the next dollar
Work through these in sequence, not in parallel.
First, business capital needs in the next two years. Stock, staff, equipment, a lease fitout, a tax liability, a working-capital buffer. If any of these are on the horizon, that money should not be locked away.
Second, borrowing needs where your equity is the security. A commercial premises, a second site, a vehicle fleet, an investment you intend to gear. The deposit and the serviceability buffer stay outside super, because the lender assesses what you can pledge, not what you have saved.
Third, and only then, super. Once the first two are funded, the tax gap is real and the caps are worth using.
| Business or direct investment | Super | |
|---|---|---|
| Tax on gains | 30 per cent minimum on the indexed gain, often more | Effectively 10 per cent on assets held 12 months or more |
| Tax on income | Marginal rate, up to 47 per cent | 15 per cent |
| Liquidity | Available when the business needs it | Locked until preservation age, generally 60 |
| Borrowing power | $200,000 of equity supports $800,000 to $1 million of lending | Nil. Not accepted as security by any lender |
| Where the money goes | Into your own business, premises or chosen asset | Into the fund’s portfolio; around 40 to 50 per cent of super is invested offshore, and very little reaches Australian small business |
| Risk | Concentrated in your business and your decisions | Diversified, but exposed to markets and to future rule changes on a locked balance |
The table is not an argument against super. It is an argument for sequencing.
The strategy that survived the budget: business real property in an SMSF
The residential borrowing ban did not touch commercial property. Limited recourse borrowing arrangements for business real property remain available, and for an owner who occupies premises the structure has a lot going for it.
The fund buys the premises, often with a loan, and leases them to your business at a market rent. The rent is deductible to the business and taxed at 15 per cent inside the fund. Commercial yields in the markets we lend into are typically 5 to 7 per cent, and the fund can still use leverage, which it can no longer do for anything residential. At preservation age the building is a superannuation asset, and in pension phase the income and any gain can be tax-free.
On the lending side, the fund needs a deposit of roughly 25 to 35 per cent plus costs, because SMSF commercial lenders lend at lower ratios than on a standard commercial loan. The lender will want a liquidity buffer in the fund after settlement, will assess the rent and member contributions for serviceability, and will look at your business as the tenant. The lender pool is narrower and appetite varies by property type, so the deal is shaped around who will lend before the fund goes to contract.
The super side needs a licensed financial adviser and your accountant. The trust deed and investment strategy have to permit the purchase and the borrowing, the lease has to be on arm’s-length terms, and the sole purpose test applies. We arrange the lending and coordinate with your adviser; we do not advise on whether an SMSF is right for you.
The full lending picture is on our SMSF loans page. Where the premises will be bought outside super, our commercial property loans page covers the alternative.
Where the market is heading
From the lending side the next few years look reasonably predictable. Fewer individual landlords as the negative gearing and CGT changes take effect. More owner-occupiers and institutional buyers filling the space. Banks that leant on investor lending for a decade now competing harder for owner-occupier and business borrowers, because that is where the growth has moved.
For an owner with a strong balance sheet, that competition is an opportunity. The next 12 to 18 months look like the best window in some time for upgraders and business borrowers, on pricing and on appetite. Owners who lock their equity into super now will watch it from the sidelines.
What to do this quarter
- List every capital need in the business for the next 24 months, with dates and amounts.
- Get a current valuation and encumbrance figure on each property you or your entities own.
- Have your accountant confirm the negative gearing grandfathering position and the small business CGT concessions against the final legislation.
- If you lease your premises, price the SMSF purchase: rent, yield, deposit, and what a lender will do.
- Only then decide how much of the concessional and non-concessional caps to use this year.
- Book a Strategy Call with us on the lending side before the money moves, not after.
Business owners who want the funding side worked through before they commit to a contribution can book a Strategy Call or call 1300 112 355. A broker in business hours; after hours a real person answers and books you in.
This information is general in nature and does not take into account your objectives, financial situation or needs. Evolve Lending and Finance is a credit licensee, not a financial adviser; superannuation decisions should be made with a licensed financial adviser and your accountant. Lending criteria, rates, fees and policies vary between lenders and may change. Eligibility and approval are subject to lender assessment.
Questions business owners are asking
Can my SMSF still borrow to buy commercial property after the 2026 budget?
Yes. The 10 August 2026 change stops SMSFs borrowing to buy residential property. Limited recourse borrowing for commercial property, including business real property your own business will occupy, was not banned and lenders continue to write it.
Can my business lease premises owned by my SMSF?
Yes, provided the property is business real property, the lease is on arm’s-length commercial terms at a market rent, and the fund’s trust deed and investment strategy allow the arrangement. Your financial adviser and accountant sign off on the super side; we arrange the loan.
How much deposit does an SMSF need for a commercial property loan?
Typically 25 to 35 per cent of the purchase price plus stamp duty and costs, with the lender also expecting the fund to hold a liquidity buffer after settlement. Exact ratios vary by lender and by property type.
Does money in super help me borrow for my business?
No. Lenders assess income, serviceability and security you can pledge. A super balance is none of those. Equity held outside super, in your name or your business, is what supports a facility.
Are existing investment properties grandfathered under the negative gearing changes?
At the time of writing this had not been confirmed in the final legislation. Treat it as unsettled and check the position with your accountant before basing any decision on it.
