What is an SMSF?
A Self-Managed Super Fund (SMSF) is a private superannuation fund that gives members direct control over how their retirement savings are invested. Many SMSFs invest in residential or commercial property. When borrowing is required, it is generally done using a Limited Recourse Borrowing Arrangement (LRBA) — the borrowing structure affected by these legislative changes.
What Is Changing?
From 10 August 2026:
- New SMSF loans (LRBAs) cannot be used to purchase residential property.
- SMSFs can still purchase residential property using available cash within the fund.
- The change applies to borrowing, not to property ownership itself.
This means anyone intending to finance a residential property purchase through their SMSF needs to ensure the purchase is contracted before the legislation takes effect.
Are Existing SMSF Loans Affected?
The proposed changes are expected to grandfather existing arrangements. This means existing SMSF residential property loans can continue under their current terms, and refinancing an existing SMSF LRBA is also expected to remain available.
If you already have an SMSF loan, these changes are unlikely to require immediate action, but reviewing your current structure with your adviser is always worthwhile.
“Provided your purchase contract is entered into before 10 August 2026, settlement may occur after that date.”
What About Commercial Property?
The proposed legislation primarily targets residential property borrowing. Borrowing to acquire commercial property (business real property) is generally expected to remain available under existing SMSF borrowing rules.
Not every commercial or non-residential property qualifies, so professional accounting and legal advice should always be obtained before proceeding.
What Does This Mean for Home Buyers?
If you’ve been thinking about purchasing residential property through your SMSF, timing is now critical. Waiting until after the legislation commences may mean borrowing is no longer an option. Our brokers can explain how the changes may affect your plans, discuss available SMSF lending options while they remain available, and help you secure finance before the legislative deadline.
Key Dates
- 26 June 2026 — The legislation passed Parliament and received Royal Assent.
- 10 August 2026 — New rules commence. To borrow through an SMSF to purchase residential property, the purchase contract must be signed before this date. Settlement can occur afterwards.
Frequently Asked Questions
Can my SMSF still buy residential property after 10 August 2026?
Yes. An SMSF can still purchase residential property using its own available funds. The restriction applies to borrowing through a new LRBA.
Can I refinance my existing SMSF loan?
Current arrangements are expected to be grandfathered, meaning refinancing existing SMSF LRBAs should continue to be possible.
Can my SMSF still borrow to buy commercial property?
Generally, yes, where the property meets the definition of business real property. Professional advice should be obtained to confirm eligibility.
Should I wait?
If borrowing is required to purchase residential property through your SMSF, delaying could mean missing the opportunity altogether. If this strategy is part of your long-term investment plan, now is the time to seek advice.
Whether you’re a home buyer exploring SMSF lending or a broker supporting clients, our team can help you prepare before the deadline — call 1300 234 863 to speak with us today.
