SMSF property rules in 2026 — what changed on 10 August

From 10 August 2026, a self-managed super fund can only use a new limited recourse borrowing arrangement (LRBA) to buy business real property. An SMSF can no longer take out a new loan to buy residential property. Source: ATO — changes to LRBAs for property from 10 August.

According to the ATO, the change doesn't apply to:

• LRBAs already in place before 10 August 2026;
• refinancing of those existing LRBAs; and
• contracts exchanged before 10 August 2026.

If you're in one of these groups, confirm the specifics with your SMSF adviser — the detail of your arrangement matters. ATO source.

• Buying residential property outright with the fund's own money, subject to the usual SMSF rules.
• Using a new LRBA to buy business real property — property used wholly and exclusively in a business.

The standard rules still apply either way: the sole purpose test, no residential purchases from related parties, and members or their relatives can't live in or rent a residential property the fund owns.

Broadly, it's land and buildings used wholly and exclusively in running a business — think a warehouse, workshop, office or shop. A business owner's SMSF buying the premises the business operates from, then leasing it back at market rent on a written lease, is the classic example. There are specific exceptions and conditions, which the ATO sets out in changes to limited recourse borrowing arrangements.

The change was made by the Treasury Laws Amendment (Tax Reform No. 1) Act 2026, which received Royal Assent on 26 June 2026. The ATO's pages linked above explain how it applies. ATO source.

• If you're considering property in super, speak to a licensed SMSF adviser before signing anything.
• If a residential investment property is the goal, look at equity-based options outside super — using home equity and the usable equity calculator are good starting points.
• Read our longer guide: using super to buy an investment property in 2026.

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