If you were planning to use your Self-Managed Superannuation Funds (SMSF) to buy an investment property with borrowed money, a recent change to superannuation law will affect your plans.
The Federal Government has announced changes to the borrowing rules for SMSFs, with new requirements scheduled to commence from 10 August 2026.
From this time, SMSFs will no longer be allowed to enter into new loans to purchase residential property using a structure called a Limited Recourse Borrowing Arrangement (LRBA).
This measure was formed as part of the wider tax reform announced by the Federal Government, including the new CGT changes and bans on negative gearing.
It’s important to note that:
The Government has noted that borrowing of this kind represents a small part of the market, with SMSFs accounting for less than 1 per cent of residential property borrowing. The reforms are intended to strengthen governance, improve risk management and ensure borrowing arrangements remain appropriate for members' retirement savings.
For more details on this change, please visit this ATO link.
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