Dear Clients and Associates,
We wanted to make you aware of a proposed change to the superannuation rules that may affect SMSFs who are looking to purchase residential property using borrowed funds.
The Government is currently discussing legislation that would prevent SMSFs from entering into new Limited Recourse Borrowing Arrangements (LRBAs) to purchase residential property.
While the legislation hasn’t yet been passed it’s expected to move through
Parliament shortly. If approved, the new rules are expected to commence 45 days after Royal Assent, which is currently anticipated to be around mid-August 2026.
The good news? The proposed changes won’t be retrospective, meaning:
Existing SMSF residential property loans will be unaffected,
Residential property contracts entered into before the commencement date are expected to remain valid, and
SMSFs will still be able to use LRBAs to acquire commercial real property.
If purchasing a residential property through your SMSF has been on your radar, now is a great time to review your plans. Acting before the proposed changes take effect will provide opportunities that won’t be available once the new rules commence.
As always, we’ll continue to monitor the progress of the legislation and keep you updated as more information becomes available.
If you’d like to chat about your SMSF investment strategy or how these proposed changes may affect you, our team are happy and available to help!
If you require any further information, simply reach out by calling our office on (03) 9863 9779 or email at admin@connectadvisors.com.au
Kind Regards,
Connect Business Advisors
Level 8, Tower 3, 18-38 Siddeley Street Docklands VIC 3008 GPO Box 430 Melbourne VIC 3001
Note: The material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.
