From 10 August 2026, Self-Managed Super Funds (SMSFs) will no longer be able to enter into new Limited Recourse Borrowing Arrangements (LRBAs) to purchase residential property, following the passing of the Federal Government’s Treasury Laws Amendment (Tax Reform No.1) Bill 2026. Existing arrangements will remain protected, but the window for new residential SMSF purchases is rapidly closing.

For investors, business owners and aspiring property buyers who have been considering an SMSF strategy, this is more than a legislative update. It’s a reminder that timing matters and that opportunities often emerge during periods of change.

At Two Birds One Loan, we’re already speaking with clients who want to understand what this means for their plans and whether they still have options available.

What Exactly Is Changing?

The new legislation restricts SMSFs from establishing new borrowing arrangements for residential property acquisitions from 10 August 2026 onwards. The reform specifically targets residential real estate purchased through an LRBA structure.

However, there are some important distinctions:

• Existing residential SMSF loans are expected to remain in place.
• Residential purchases already under contract before the commencement date may qualify under transitional provisions.
• Commercial property lending through SMSFs remains available where the property qualifies as “business real property”.

There Is Still a Window of Opportunity

While the deadline may seem close, there is still time for eligible buyers who have already started planning their SMSF property journey.

Industry commentary suggests that transactions where contracts are exchanged before the commencement date are expected to be protected, even if settlement occurs after 10 August 2026.

For buyers who have been sitting on the fence, the next few weeks could be critical. If purchasing residential property through super has been part of your long-term wealth strategy, now is the time to review your options and understand where you stand.

Existing SMSF Property Owners Can Breathe Easy

One of the biggest questions we’re hearing is: “What happens to my current SMSF loan?”

The good news is that existing residential SMSF borrowing arrangements are expected to be grandfathered under the new legislation. This means investors who already own property within their SMSF won’t be forced to sell or unwind their structures simply because the rules are changing.

There may also continue to be opportunities for refinancing existing SMSF loans, subject to lender policy and individual circumstances.

For current SMSF investors, this creates a valuable opportunity to review:

• Loan structure
• Interest rates
• Cash flow strategy
• Long-term retirement goals

Commercial Property Remains a Powerful Strategy

While residential SMSF borrowing is changing, commercial property remains a compelling option for many Australians.

For business owners in particular, purchasing their premises through an SMSF can continue to offer significant strategic benefits. Many SME owners use commercial property ownership as a way to combine business growth with retirement planning, building wealth inside super while retaining control over where their business operates.

As the market adjusts to the residential changes, we expect commercial SMSF lending conversations to become increasingly important over the coming years.

What Should You Do Now?

Whether you’re:

• Considering purchasing property through your SMSF
• Reviewing an existing SMSF loan
• Exploring commercial property opportunities
• Unsure how the changes affect your plans

Now is the ideal time to have a conversation.

Legislative changes create uncertainty, but they also create opportunities for those who act early and seek the right guidance.

The Bottom Line

The SMSF residential lending window may be closing, but opportunities still exist for investors who are informed, prepared and proactive.

At Two Birds One Loan, we help Australians cut through the noise, understand their options and create lending strategies aligned with their long-term goals.

If you have questions about SMSF lending, refinancing, commercial property or your next property move, we’d love to help.

Ready to explore your options?

Book a complimentary strategy conversation here with the Two Birds One Loan team today.