SMSF residential lending is changing

The 2026 residential SMSF change, explained

From 10 August 2026, self-managed super funds will no longer be able to take out new Limited Recourse Borrowing Arrangements (LRBAs) to buy residential property. It restricts new borrowing, not the purchase itself — a fund with enough cash can still buy residential property outright. Existing SMSF residential loans (and refinancing them) are grandfathered, and commercial SMSF lending is unaffected.

For years, an SMSF could borrow to buy a residential investment property using an LRBA. That is being wound back: the law is made (it received royal assent on 26 June 2026) and the restriction on new residential SMSF borrowing commences 10 August 2026. In our experience, many lenders have already closed their books to new residential SMSF purchase applications ahead of it.

Two things are protected (grandfathered): SMSF residential loans already in place, and refinancing those existing loans. Commercial SMSF borrowing (including buying your own business premises) is untouched. So if your fund already holds residential property, nothing about your existing loan changes.

Can I still refinance my existing SMSF residential loan?

Yes. If your SMSF already owns a residential property with a loan, you can still refinance that loan: existing arrangements are grandfathered, so the ban affects new purchases, not loans already in place.

Refinancing keeps the property and its bare trust exactly where they are; you're switching the loan, not buying the asset again. With many SMSF loans written years ago at higher rates, a review is often worthwhile.

• Find out whether a better rate or better-fit lender is available
• No new stamp duty: the property doesn't change hands
• Free SMSF loan review before you commit

Buying residential property in your own name

If residential property was the plan, investing outside super (in your personal name) is the most common path from here, and often simpler.

You borrow as an individual (or with a partner), the loan is a standard investment loan rather than an LRBA, and you have far more lenders and sharper rates to choose from. The trade-off is that the rental income and any gains are taxed at your marginal rate rather than super rates, worth weighing up with your accountant.

Buying in your own name isn't the only path outside super: some investors buy through a discretionary trust or a company instead. The borrowing works in a similar way, and the right structure depends on tax, asset protection and your long-term plan - our Trust vs Company calculator compares the outcomes side by side, and your accountant can confirm the fit.

This is exactly the path we help first-time investors take. Our First Investment Property guide walks through deposit, using equity, borrowing power and the costs to budget for.