45 Days to Buy Property in Your SMSF Before Borrowing Is Banned

On 23 June 2026 the Albanese government did a deal with the Greens to ban new Limited Recourse Borrowing Arrangements (LRBAs) for residential property held in self-managed super funds. The amendment was tabled by Greens Senator Nick McKim and is bundled into the Treasury Laws Amendment (Tax Reform No. 1) Bill 2026. As of 26 June, the Senate has not yet voted but the vote is expected before Parliament rises on 2 July, with Royal Assent following within days. The ban then commences 45 days after Royal Assent. Treasurer Jim Chalmers has estimated the change will raise around $50 million over the forward estimates.

If Royal Assent lands around 3 July as expected, the cliff date is approximately 17 August 2026. From today that is about 52 days. The practical drop-dead for new SMSF property enquiries is mid-to-late July, because lender pipelines are about to jam and bare trust setup takes 2-3 weeks.

This post is general information for investors with an existing SMSF (or one being set up). It is not personal financial product advice. SMSF and LRBA decisions can only be made on advice from your SMSF accountant and a licensed financial adviser. Nothing here changes that.

In one minute

• New SMSF residential property loans (LRBAs) are being banned 45 days after Royal Assent, which is expected to land the cliff around 17 August 2026
• You need a contract exchanged before that cliff date. Settlement can happen afterwards
• Existing SMSF property loans are fully grandfathered, including the right to refinance to a different lender
• Commercial and business real property loans are not affected
• The next 45 days are the last chance to lock in residential leverage inside super. After that, cash purchase is your only path

The dates you actually need

The 45-day clock starts when the Governor-General signs the bill. Until then, the existing LRBA framework is in place. Once the clock starts, it does not pause.

What’s banned, and what isn’t

The amendment closes off new LRBAs used to acquire residential property by any superannuation fund, which in practice means SMSFs. A handful of things are not affected:

Business real property is the live carve-out worth understanding. If you run a business that needs premises (a workshop, an office, a warehouse, a clinic), an SMSF can still borrow to buy those premises and lease them back to the operating company. That pathway sits outside the residential ban.

What’s actually at stake if you miss the window

The ban is not just about one residential property. It is about whether you can ever use leverage inside super to buy property again, for as long as the ban stays on the books.

Take a 35-year-old investor with an SMSF balance of around $250,000, enough for a 20-30% deposit plus stamp duty and a buffer. With an LRBA, that $250,000 turns into a $600,000 residential property purchase. Without the LRBA option, the same $250,000 sits in a balanced industry super fund and compounds on its own.

Run both paths for 25 years at conservative growth assumptions (6% capital growth on the property, which sits below the long-term Australian residential average; 7% on the super balanced option, the industry median per SuperRatings):

• The property route: $600,000 grows to around $2.57 million by age 60, all inside the lowest-tax structure available in Australia (15% in accumulation, 0% in pension phase). After paying down the loan over the same horizon, ending equity sits at roughly that property value.
• The no-leverage route: $250,000 compounds to around $1.36 million.

That’s a gap of roughly $1.2 million from one decision: using leverage inside super versus not.

Don’t exchange before the cliff and the same investor has to find another way to build that exposure inside super. Cash works if your fund has the balance, but most SMSFs don’t. Buy a smaller property outright and you’ve given up the leverage entirely. Build the equivalent exposure outside super and you’re on a different tax base for the whole hold. Each of those is a meaningfully worse outcome over 25 years, and “meaningfully worse” runs into the millions.

No government has flagged a policy reversal. So the working assumption is that residential SMSF leverage closes in 45 days and stays closed.

The 45-day trigger is contract, not settlement

This is the practical detail that changes what’s possible in the next four weeks.

The draft bill says the ban does not apply where “the contract of sale was entered into before that commencement, even if the settlement for the acquisition of the asset happens after that commencement”. You need to have exchanged contracts before the cliff. Settlement can land afterwards.

For a typical 45-60 day settlement, the real test is whether you can get a contract signed and exchanged by mid-August. Not whether you can complete the whole deal by then. That is a much more workable challenge.

Can you really do it in 45 days? Yes.

Tight, but workable, if you already have an SMSF or you’re ready to move on setup straight away. Realistic timeline:

Week 1 (now): Speak to your SMSF accountant. If the strategy fits, get an LRBA loan pre-approval moving (a small number of non-bank lenders remain active in SMSF lending; your broker will know the current shortlist). If you don’t have an SMSF yet, sign the establishment paperwork. Bare trust documents drafted in parallel.

Weeks 2-3: SMSF and bare trust established (allow 2-3 weeks for setup including ABN, TFN, bank account, custodian trust deed). Loan pre-approval landed. Buyers agent or your own search active. Shortlist filtered for SMSF-suitable criteria (clear title, owner-occupier appeal for resale, nothing exotic that complicates the bare-trust holding).

Weeks 3-6: Property identified. Due diligence (building and pest, valuation, contract review for sole purpose test alignment). Contract exchanged before 17 August.

Week 6 onwards: Settlement on a normal 30-60 day cycle. Can happen after the cliff. The transitional rule protects you.

Three things will trip people up: (1) lender SMSF approval queues, which will get worse every week; (2) bare trust establishment if you’re starting from scratch; (3) state-specific contract exchange. In Victoria the vendor’s statement (Section 32) has to be ready before exchange. In NSW the standard 5-business-day cooling-off period applies, so aim for exchange about a week before the cliff to let cooling-off lapse safely.

If you already hold an SMSF residential LRBA

Nothing changes about your existing arrangement. There is no forced sell-down, no LVR reset, no value trigger that unwinds the loan. Standard SMSF compliance continues (sole purpose test, related-party rules, in-house asset limits). Your existing structure runs to natural completion.

Can you refinance the existing loan later?

Yes, based on the draft bill. The amendment specifically excludes “maintaining or refinancing a borrowing of money under another arrangement entered into before that commencement” from the new prohibition. You can move your existing LRBA to a different lender for a better rate without losing grandfathered status.

Two important caveats. First, this is the draft bill reading; ATO transitional guidance has not been issued and the final operational position may add detail. Second, material modifications to the existing arrangement (a top-up, equity release, additional security, change to the underlying asset) may be treated as a new arrangement and therefore caught by the ban. Standard like-for-like refinance to a different lender looks safe. Anything that looks like a new LRBA in substance probably is not.

If your existing LRBA still has a 7 in front of the rate, refinance shopping over the next 12-18 months is going to be worth real money.

If you can’t make the 45-day window

Some SMSF investors will run out of clock. The right Plan B depends on what’s already in the fund, the investor’s age, and the time to preservation age. A few options worth raising with your accountant:

• Cash purchase inside the SMSF. If the fund has the balance, residential property can still be acquired outright by the SMSF. No leverage, but the asset still sits in the 15%/0% tax environment.
• Business real property pivot. If you run a business that needs premises, the SMSF LRBA pathway is still open for commercial and business real property.
• Outside-super property purchase. Different tax treatment, different leverage, different estate considerations. Worth a clean comparison rather than a default. See our property portfolio outside super breakdown.
• Hold and wait. Future governments can reverse the ban. Industry pushback has already been sharp (joint MFAA, CAFBA and AFIA statement called it choking off investment). A future reversal isn’t impossible, but planning around it isn’t a strategy.

Forcing a bad property through the door before the cliff is a worse outcome than missing the window. The maths above only works on the right property.

What we’re doing with SMSF clients right now

Three things are dominating the conversation with our SMSF clients this week.

First, the cliff is for new contracts, not new ideas. If you’ve been mulling an SMSF property purchase for a while, the next four weeks force the decision. The cost of waiting just stopped being theoretical.

Second, the right property under time pressure is much harder than just any property under time pressure. The buyers agent edge in this window is off-market and pre-listing access, because every other SMSF buyer is hitting the same realestate.com.au listings with the same urgency. Differentiated supply matters more in the next four weeks than it has in any window we’ve worked through.

Third, the lender queue is the single biggest practical risk. SMSF lender backlogs were already long before 23 June. They will be worse by mid-July. Brokers and lenders should be the first call this week, not the third.

If you’re buying interstate inside an SMSF, the buyers agent and broker need to be coordinated from day one, not week three. The clock doesn’t reward sequencing.

Sources

• Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 (Parliament bill page)
• Treasurer’s second reading speech (Chalmers)
• PM’s media release, 23 June 2026
• Greens media release on the deal
• SMS Magazine: LRBAs banned for residential property
• GrowSMSF deep-dive on the bill text
• The Adviser: industry response to the ban

Verified against the Treasury Laws Amendment (Tax Reform No. 1) Bill 2026, the 23 June 2026 PM-Treasurer announcement, Greens Senator Nick McKim’s amendment, the Treasurer’s $50 million forward-estimate revenue figure, and current industry coverage. Last fact-checked 26 June 2026. Senate vote and Royal Assent had not yet occurred at time of writing; ATO transitional guidance has not yet been issued.

This post is general information only and is not financial product advice or tax advice. SMSF decisions and LRBA structures are personal financial product advice that can only be given by a licensed adviser. The 45-day window and bill mechanics described above reflect the draft bill text as at 24 June 2026 and may be amended before Royal Assent. ATO transitional guidance has not been issued at the time of writing. Speak to your SMSF accountant and a licensed financial adviser before acting on any of the above.

If you have an SMSF and want to work out whether a property purchase in the next 45 days fits your strategy, book a free discovery call. We can run the property search and execution while your accountant and adviser handle the structural side.