A newly legislated ban on borrowing to buy residential property inside self-managed super funds takes effect on 10 August 2026, leaving a narrow window that industry specialist Jason Bibby says is shorter than most Australians realise.
The ban on new limited recourse borrowing arrangements (LRBAs) for residential property inside self-managed super funds (SMSFs) received Royal Assent on 26 June 2026 and commences on 10 August 2026. It followed a federal budget deal between the government and the Greens to pass wider tax reforms through the Senate.
Jason Bibby, Managing Director of specialist firm SMSF Financial Solutions, says the change is the most significant shift in SMSF property investing in nearly two decades, and that the practical runway to act is closing fast.
“This is the biggest change to borrowing in super since limited recourse borrowing was introduced back in 2007,” Mr Bibby said. “The important thing people need to understand is that it is not yet in effect. That is exactly the point. There is a short window before it commences, and anyone who has been weighing up a property purchase through super has a genuine but rapidly closing runway to act.”
Under the new rules, the change is prospective. Existing SMSF borrowing arrangements are protected, and the ban applies to new residential arrangements only. Commercial property, including business premises held through an SMSF, is not affected.
Mr Bibby says the detail that catches people out is the difference between contract date and settlement date.
“The part that surprises people is that it is the contract that has to be signed before the deadline, not the settlement,” he said. “A contract signed before commencement is locked in under the current rules, even if settlement happens months or years later. That makes the window far more achievable than people assume, provided they move now.”
To be protected under the current rules, a contract needs to be signed before the ban commences on 10 August, with the last business day before that falling on Friday 7 August.
The catch, Mr Bibby says, is the lead time involved in establishing a fund. “A self-managed super fund takes several weeks to set up and roll over. Counting back from early August, the practical decision window is now, not next month. Anyone starting a fresh setup in late July is cutting it very fine.”
Bibby, who was quoted in national coverage when the deal was announced, notes that demand has lifted sharply since the changes were confirmed. He is careful to stress the strategy is not suited to everyone.
“Buying property inside super was never right for everyone, and it still isn’t. It suits those with a sufficient balance and a long time horizon, and it carries real considerations around diversification and liquidity,” he said. “What has changed is that the option itself is being taken off the table. So for the people it does genuinely suit, the message is simply to understand the timeframe and seek advice quickly rather than leave it too late.”
He says the tax settings are part of why the strategy has held appeal. Following the May budget, superannuation retained its concessional treatment while several other property investment avenues tightened, which Mr Bibby says is part of the reason the government moved to close the borrowing option.
Australians considering their position are encouraged to seek professional guidance and to consider the appropriateness of any strategy to their own circumstances before acting.
About SMSF Financial Solutions
SMSF Financial Solutions is a specialist self-managed super fund firm based on the Gold Coast, Queensland, working with clients across Australia. The firm focuses exclusively on SMSFs, covering establishment, administration, compliance and investment support. It operates under a general advice model.
Media Contact
Jason Bibby
Managing Director SMSF Financial Solutions
Email: [email protected]
Mobile: 07 3186 9799
Media enquiries and interview requests welcome. Jason Bibby is available for comment on SMSFs, superannuation and property investing.
