SMSF Residential Property LRBA Ban Now Law – 10 August 2026 Deadline Confirmed

Countdown Begins as Royal Assent Locks in SMSF Property Borrowing Changes

The uncertainty is over.

In a remarkably swift legislative process, the Federal Government secured support from the Greens and passed the Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 through both Houses of Parliament in less than 48 hours.

The Bill received Royal Assent on 26 June 2026, confirming that the ban on using Limited Recourse Borrowing Arrangements (LRBAs) to purchase residential property through an SMSF will commence on 10 August 2026.

For SMSF trustees considering a residential property purchase using borrowed funds, the countdown has officially begun.

What Has Changed?

Unlike last week’s announcement, the legislation is now law.

From 10 August 2026, SMSFs will no longer be able to establish a new LRBA to acquire residential property.

The focus has now shifted from “if” the changes will occur to “how much time remains” before they take effect.

Only Weeks Remain

With less than two months between Royal Assent and commencement, trustees, lenders, solicitors and SMSF advisers are working within a very limited timeframe.

Anyone intending to purchase residential property through an SMSF using borrowings should seek advice immediately. Depending on the transaction, this may involve:

• Signing the contract of sale.
• Obtaining formal finance approval.
• Establishing the bare trust.
• Completing the LRBA documentation before 10 August 2026.

Every transaction is different, so professional advice is essential.

Existing SMSF Property Loans Continue

The legislation generally protects residential property LRBAs established before the commencement date.

This means existing borrowing arrangements are expected to continue under grandfathering provisions.

The changes do not affect:

• Residential properties already owned by an SMSF.
• Residential property purchased without borrowing.
• Existing residential LRBAs established before 10 August 2026.
• Commercial property borrowing arrangements.

What Should SMSF Trustees Do?

If purchasing residential property through your SMSF has been part of your retirement strategy, now is the time to review your plans.

Key actions include:

• Confirm whether your transaction can be completed before 10 August 2026.
• Speak with your lender, solicitor and SMSF adviser without delay.
• Review alternative investment options if the deadline cannot be achieved.

Waiting until the final weeks may significantly reduce the likelihood of completing an LRBA before the new rules commence.

Need Help?

The team at iCare Super continues to assist SMSF trustees with property transactions, compliance and administration during this legislative transition.

If you’re unsure how the new LRBA rules affect your SMSF, contact us to discuss your circumstances.

Related Article: Earlier this month, we published a detailed guide explaining the proposed reforms, including what an LRBA is, grandfathering provisions, commercial property rules and frequently asked questions. This update reflects the legislation now receiving Royal Assent and confirms the commencement date of 10 August 2026.