The SMSF LRBA ban is here.
Your SMSF still has a path to property.

What the government has announced

On 23 June 2026, the Albanese government confirmed it will ban new limited recourse borrowing arrangements (LRBAs) for residential property inside superannuation funds — including SMSFs. The announcement came as part of a deal struck with The Greens to secure Senate passage of the government's broader budget tax legislation.

Under the arrangement, the Greens supported the budget package in exchange for a government commitment to close what the party described as a loophole that allowed high-net-worth investors to sidestep broader property tax reforms. Prime Minister Albanese and Treasurer Chalmers confirmed the deal in a joint statement on 23 June, framing the LRBA clampdown as part of a wider reshaping of the tax system around housing and investment.

The focus on LRBAs reflects longstanding regulatory unease. The 2014 Murray Financial System Inquiry — commissioned under the then-Coalition government — recommended tightening SMSF borrowing rules. The Council of Financial Regulators raised the same concerns in 2019 and again in 2022. Tuesday's announcement is the first legislative response to those repeated calls.

Treasurer Chalmers sought to frame the scale of the change as modest: less than 1% of total residential property borrowing in Australia is done through SMSFs, and less than half a per cent of new lending flows each year. Even so, the announcement has immediate implications for SMSF trustees and their advisers who were planning to use an LRBA structure.

What is changing — and what is not

Understanding the precise scope of the ban matters. Not everything changes the day the ban takes effect.

The last two points are worth pausing on. The ban applies to SMSF borrowing — specifically, the SMSF being a party to a limited recourse borrowing arrangement. It does not prohibit an SMSF from investing in a managed investment scheme that itself uses leverage to acquire property. These are structurally distinct situations, and the distinction matters enormously for what comes next.

Why the LRBA was always a compromised solution

The LRBA carve-out has existed since 2007, when the Simpler Super changes permitted superannuation funds to borrow to invest under a narrow exception to the general prohibition in s67 of the SIS Act. In practice, only SMSFs made meaningful use of it — larger APRA-regulated funds had access to other investment structures that made LRBA unnecessary.

For SMSF trustees, the LRBA was always a blunt instrument. It required:

• → A bare trust (holding trust) to hold legal title separate from the beneficial interest
• → A specialist SMSF lender — mainstream banks have largely withdrawn from this market
• → Interest rates typically 0.5–1.5% above standard investment loans
• → Ongoing compliance review: single acquirable asset rule, improvement prohibition (s67B), related-party restrictions
• → Complete concentration of risk in a single asset inside a retirement fund

The ban on new LRBAs does not remove SMSF trustees' appetite for property. It removes one particular mechanism for accessing it — a mechanism that came with significant constraints and complexity.

The Assetora Sub-Fund: a different structure, not a workaround

Assetora's Sub-Fund (ASF) structure was not designed in response to the LRBA ban. It predates this announcement and has operated within the Assetora Investment Fund (ARSN 167 020 626) since the platform's inception, under the oversight of Assetora Australia Limited (AFSL 444365) as Responsible Entity, with Perpetual Corporate Trust Limited as independent custodian.

The structural difference from an LRBA is significant. Under an LRBA, the SMSF itself is a party to the borrowing — the ban directly applies. Under the Assetora structure, the SMSF holds units in a managed investment scheme. The sub-fund holds the property. Any debt sits within the sub-fund structure, not on the SMSF's balance sheet. The SMSF never borrows. The SIS Act borrowing prohibition and its LRBA exception simply do not apply to the SMSF's investment.

How an SMSF invests through an Assetora Real Estate ASF

What SMSF trustees and advisers should do now

The steps depend on where you currently sit.

If your SMSF already holds an LRBA over residential property

Your arrangement is grandfathered. The immediate priority is confirming your documentation is in order before the transition window closes after royal assent. There is no forced unwind, no required action — your existing borrowing structure is not affected by the ban.

If you were planning a new residential LRBA

The effective deadline for executing a new deal is royal assent plus 45 days. After that, the path to new borrowing inside super for residential property closes. If you have a deal in train, move quickly and confirm with your solicitor whether your timeline meets the transition period.

If you are planning the medium-term SMSF strategy

The question shifts from "can we borrow inside super for property" to "how do we build and maintain property exposure inside super post-LRBA." That is precisely the conversation Assetora is designed for. The Real Estate ASF category allows SMSF trustees to access property — including geared property — in a structure that has operated throughout the LRBA era and continues without interruption after the ban takes effect.

Frequently asked questions about the SMSF LRBA ban