LRBA Ban – What SMSF Property Buyers Should Do Now

If you are planning to purchase residential property through your SMSF using a Limited Recourse Borrowing Arrangement (LRBA), time is running out.

The good news is that, provided the property contract is entered into by both the SMSF trustee and the bare trust trustee on or before 9 August 2026, the SMSF ABN complying status, rollover of your existing superannuation, and loan approval can all occur after that date.

Scenario 1 – Your SMSF ABN Has Not Yet Been Issued

You can still proceed before the deadline. However, there are several practical issues to consider.

• You can still sign the contract of sale using the bare trust.
• You may need to pay the deposit personally because the SMSF bank account is not yet available.
• The deposit will generally be treated as a non-concessional contribution to your SMSF.
• Negotiate a settlement period of at least three months to allow sufficient time.
• Apply for conditional finance approval as early as possible.

Scenario 2 – Your SMSF ABN Has Been Issued but the ABN Is Not Yet Complying

If your SMSF has received an ABN but the ATO has not yet confirmed the fund as complying, you should continue progressing your purchase.

• You can still sign the contract of sale using the bare trust.
• Open the SMSF bank account.
• Apply for conditional or formal loan approval as soon as possible.
• Negotiate a longer settlement period.

Scenario 3 – Your SMSF Is Fully Established

If your SMSF is fully established and complying, this is the ideal situation and will apply to most SMSFs once they are set up. You can sign the contract of sale now and allow a reasonable settlement time.

• Ensure the SMSF bank account is active.
• Complete the rollover of your existing superannuation balance as soon as possible.
• Finalise your loan approval.

Don’t Rush the Property Purchase

Although the deadline is approaching, it is still important to carry out proper due diligence before signing a contract.

Make sure you:

• Obtain building and pest inspections.
• Have the contract reviewed by your solicitor or conveyancer.
• Know your SMSF’s borrowing capacity and required cash flow.

Meeting the deadline is important, but purchasing the right investment property is even more important.

Need Help Before the Deadline?

Our team can assist with:

• SMSF establishment.
• Bare trust establishment.
• SMSF ABN and TFN applications.
• SMSF compliance and administration.
• Guidance throughout the establishment process before the LRBA changes commence.
• Loan approval and application.

Starting early gives you the best chance of completing everything before the deadline.

Disclaimer

This information is general in nature only and does not take into account your personal objectives, financial situation or needs. It is not legal, financial or taxation advice.

iCare Super provides SMSF establishment, administration and compliance services only. We do not hold an Australian Financial Services Licence (AFSL) and do not recommend or endorse any property, property developer, buyer’s agent, mortgage broker, or investment product in Australia or overseas.

Whether an SMSF qualifies for the grandfathering provisions depends on the legislation, the contract entered into, ATO requirements, and your individual circumstances. You should obtain independent legal, financial, and taxation advice before establishing an SMSF, entering into an LRBA, or purchasing any property.