On 23 June 2026, the federal government agreed to ban self-managed super funds from taking out new loans to buy residential property. It came together quickly as part of the Greens’ price for supporting the government’s wider tax package, so if you run an SMSF, or were planning to buy property through one, here is what it actually means for you.
What the change actually does
The ban targets one specific structure: the limited recourse borrowing arrangement, or LRBA. An LRBA is the only way an SMSF can legally borrow to buy an asset, and it has become the standard vehicle for funds buying investment property. Under the agreed amendment, an SMSF will no longer be able to enter a new LRBA to acquire residential property.
- It applies to new borrowing for residential property
- It does not stop an SMSF buying residential property outright with its own cash
- Commercial property is not the target of this change
Who this affects
Two groups feel this most: trustees who planned to use borrowed money to buy a residential investment inside their fund, and the property and advice industry that markets those structures. If borrowing was central to your plan, the numbers change, so it is worth rerunning them before you commit to anything.
If you already have an SMSF property loan
The key message for current trustees is simple: existing arrangements are protected. The government has confirmed that LRBAs already in place, and contracts signed before the change commences, are not affected. A transition window after the legislation receives royal assent gives deals that are genuinely in progress some room as well. In short, there is nothing you need to unwind.
When it starts
As of late June 2026 the amendment has been agreed, but it still has to complete its passage through parliament. It is expected to pass before parliament rises in early July, with the ban commencing a set period after royal assent. Because the exact start date depends on when assent is given, treat any specific date as provisional until the legislation is final.
What to do now
If you are part-way through an SMSF purchase that relies on borrowing, speak to your adviser this week rather than next month, because the timing of your contract may decide whether the deal sits inside the protected window. If you already hold a fund with an LRBA, there is nothing to action, though it is a good prompt to review your wider strategy. And if you were counting on SMSF borrowing for a future purchase, now is the time to look at the alternatives.
Get ahead of it, not caught by it
Super rules move, and this one moved fast. The funds that handle change well are the ones that take advice early and keep their strategy documented. If you are unsure where this leaves your SMSF, a short conversation now can save a scramble later.