What Is an LRBA? SMSF Property Loans Explained After the 10 August 2026 Changes
An SMSF property loan is called an LRBA. Here is what it is, what changed on 10 August 2026, and what has stayed the same.
The short version
- An SMSF loan for property is called a limited recourse borrowing arrangement, or LRBA.
- From 10 August 2026, a new LRBA can only be used to buy business real property, such as commercial premises. It can no longer be used to buy residential property.
- LRBAs that started before 10 August 2026, and refinancing them, are not affected.
- Your SMSF accountant and solicitor look after the fund side. A broker looks after the lending side.
If you have heard the letters LRBA and nodded along without being sure what they mean, you are not alone. Here is what an LRBA is, what changed, and what has stayed the same.
What is an LRBA?
An LRBA is the type of loan a self-managed super fund (SMSF) uses to borrow to buy a property. Two things make it different from a normal home loan:
- Limited recourse. If the loan cannot be repaid, the lender’s claim is limited to the property bought with the loan. It cannot go after the other assets in the fund.
- The property sits in a separate trust. It is usually held in a bare trust until the loan is paid off, and the fund pays the loan from rent and contributions.
Because of these rules, and because fewer lenders offer SMSF loans, the paperwork is more involved and rates are often higher than standard investor loans.
What changed on 10 August 2026
The Treasury Laws Amendment (Tax Reform No. 1) Act 2026 received Royal Assent on 26 June 2026. From 10 August 2026, a new LRBA can only be used to acquire real property if it is business real property. That means new SMSF loans to buy residential property are no longer available.
| Your situation | What it means |
|---|---|
| You have an LRBA that started before 10 August 2026 | Not affected |
| You want to refinance that existing loan | Not affected, but each lender sets its own policy |
| You exchanged a binding contract before 10 August 2026 | Not affected, even if settlement or the loan comes later |
| You want a new loan to buy residential property | Restricted under the new rules |
| You want a loan to buy business real property | Still possible under the new rules, with specialist advice |
What this means in practice
- If you already hold property in your SMSF, it can still be worth checking you are on the right loan. A refinance review shows where you stand.
- If you were planning to borrow to buy a new residential property, the loan route has closed. Your accountant or SMSF adviser can talk through your other options.
- The rules apply to any new loan used to buy residential property, so a lender cannot top up a shortfall on a new residential purchase.
SMSF rules are strict, and the penalties for getting them wrong are serious. Talk to your SMSF accountant and solicitor about your fund, your trust deed and your investment strategy before you act. We can help with the lending side.
Get the SMSF Refinance Checklist
The questions to ask and the documents to gather before you refinance a loan inside your SMSF.
Send me the checklistWe will email it straight to you.Your next steps
- Find the date your SMSF loan started.
- Book time with your SMSF accountant and solicitor.
- Gather your latest loan statement and fund financials.
- Talk to us about lenders who offer SMSF refinancing.
Sources and when we checked
Checked on 19 October 2026. Sources: Treasury Laws Amendment (Tax Reform No. 1) Act 2026 (Royal Assent 26 June 2026); Australian Taxation Office, “Changes to LRBAs for property from 10 August”. Rules, rates and lender policies can change, so confirm with the official sources and your own advisers. This is general information only and is not financial, tax or legal advice.
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This article is general information only and does not take into account your personal financial situation, needs or objectives. Consider whether it is appropriate for you before acting on it. Figures and rules can change, so always check the latest details with the relevant authority.
Richard Morris is a Credit Representative (CRN 570376) of Strategic Mortgages Perth (ACR 570592), authorised under Connective Broker Services Pty Ltd (Australian Credit Licence 389328). This is not tax or legal advice. Please speak to your accountant or solicitor about your own situation.