16 Jul Time is running out to borrow in your SMSF to buy property
If you want to buy a residential property in your self-managed super fund and borrow to pay for it, the new SMSF borrowing ban gives you a hard deadline: 10 August 2026.
What the SMSF borrowing ban changes
A last-minute amendment to the legislation behind the 2026–27 Federal Budget means that from 10 August, SMSFs can no longer buy residential property using a limited recourse borrowing arrangement — basically, take out a loan. The change was the price of Greens support for the Government’s wider CGT and negative gearing reforms, and it became law on 26 June (Treasury Laws Amendment (Tax Reform No. 1) Act 2026).
It’s a big change, and it has flown well under the radar.
What it actually means
To beat the deadline, you must have entered into a contract to buy before 10 August. Settlement can happen later, but the contract has to be in place first. If this is you, talk to your SMSF specialist now about exactly what needs to be signed, and when, for your purchase to qualify.
What’s not changing
- Existing SMSF property loans are grandfathered. Already have a loan in place? Nothing changes and no need to refinance, restructure or sell.
- SMSFs can still buy residential property outright. The ban is on borrowing, not owning. If your fund has the cash, you can still buy.
- Commercial property is untouched. Your SMSF can still borrow to buy business premises, including the building your own business operates from.
The bigger picture
Here’s what most of the coverage has missed. With negative gearing and the CGT discount now wound back for property held in your own name or in a trust, an SMSF is just about the last place you can buy an established investment property and still benefit from super’s low tax rates. If your fund can buy outright, the strategy is still attractive.
Thinking of acting before 10 August?
I’m navigating this deadline in my own super fund right now, so I can tell you first-hand: the timeline is tighter than it looks. Lenders are swamped, bare trust paperwork takes longer than you’d expect, and the right property doesn’t appear on demand, unless of course you’re using a buyers’ agent! If you want to act, start today.
If you’ve made the decision with your adviser and need to secure the right property before the window closes, that’s exactly where we come in.
This article is general information only and does not take into account your objectives, financial situation or needs. It is not financial, tax or legal advice. Speak to a licensed financial adviser or SMSF specialist before making any decisions about your superannuation.