Australia’s property market is about to experience a notable policy shift. From 10 August 2026, Self-Managed Super Funds (SMSFs) will no longer be able to enter into new Limited Recourse Borrowing Arrangements (LRBAs) to purchase residential property. While SMSFs can still buy residential property outright, the ability to leverage borrowing within superannuation for residential acquisitions is ending.

What Is an LRBA?

An LRBA is the structure that allows an SMSF to borrow funds to acquire an asset, with the lender’s security limited to that specific asset. For many investors, this has been a popular way to use superannuation savings to enter the residential property market.

The Key Dates

  • 23 June 2026: Government agreement announced.
  • 25 June 2026: Legislation passed Parliament.
  • 26 June 2026: Royal Assent received.
  • 10 August 2026: Ban on new residential property LRBAs commences.
  • 9 August 2026: Last day for contracts to be exchanged and be grandfathered.

What Is Changing?

From 10 August 2026, SMSFs will be prohibited from entering new borrowing arrangements to acquire residential property. Investors wishing to buy residential property within super will generally need sufficient funds available within the SMSF to complete the purchase without borrowing.

What Is Not Changing?

Existing SMSF residential property loans remain in place and are grandfathered. Residential properties already owned by SMSFs are unaffected. Contracts exchanged before the commencement date remain protected. Commercial and business real property borrowing remains available under existing rules. SMSFs can still purchase residential property using cash.

What does “grandfathered” mean?

A grandfathered arrangement is one that was entered into before the law changed and is therefore allowed to continue under the previous rules. In this case, SMSF residential property borrowing arrangements entered into before 10 August 2026 can generally continue unaffected by the new legislation.

What Does This Mean for Real Estate Agents?

Agents should understand that the change does not eliminate SMSF buyers, but it will likely reduce the number of leveraged SMSF investors entering the residential market. Buyers with existing SMSFs may need larger balances to participate, and some investors may accelerate purchasing decisions before the commencement date. Commercial property transactions may be less affected, as SMSFs can still use borrowing arrangements to acquire eligible commercial and business real property.

While this is a national change, South Australian real estate agents should be aware of the potential impact on local investor activity in the lead up to 10 August 2026. Buyers using SMSFs may look to accelerate purchasing decisions before the commencement date, which could impact transaction timing and finance approvals.

What Should Agents Watch For?

In the lead up to 10 August 2026, agents should pay particular attention to offers from purchasers intending to buy through an SMSF.

If a purchaser requires finance through an SMSF borrowing arrangement, it is important to understand whether the transaction can settle before the commencement of the new rules or whether the borrowing structure will still be available.

Agents should take extra care when reviewing offers that:

  • Are subject to finance approval
  • Include references to SMSF borrowing
  • State that finance has been pre-approved
  • Have extended settlement periods that may run beyond the commencement date

Where uncertainty exists, purchasers should be encouraged to seek advice from their mortgage broker, accountant, financial adviser or legal adviser before proceeding.

Opportunities for Agents

Position yourself as a trusted source of information. Educate investors about the deadlines, work closely with mortgage brokers, accountants and financial advisers, and identify SMSF prospects who may still be considering a purchase. This change provides an opportunity to create urgency while also demonstrating expertise.

Final Thoughts

The key message is simple: SMSFs can still buy residential property, but from 10 August 2026 they generally cannot borrow to do so. For real estate agents, understanding this distinction will be essential when advising investors and anticipating future demand trends.

Sources: Treasury Laws Amendment (Tax Reform No. 1) Act 2026 and industry summaries of the SMSF LRBA reforms.