The SMSF Property Ban Is Now Law. It Will Raise $50 Million and Fix Almost Nothing.

On 23 June 2026, the government agreed to ban new limited recourse borrowing arrangements for residential property inside self-managed super funds, as the price of Greens support for its broader tax package. It passed both houses within days. Royal Assent landed on 26 June. From roughly 10 August 2026, no SMSF will be able to take out a new loan to buy a house.

What the SMSF LRBA Ban Actually Does

I want to be precise about what this is, because the framing around it has been anything but.

This measure is projected to raise about $50 million over four years. To put that in perspective, that's a rounding error against the broader tax package it was traded for. SMSFs represent under 1% of residential property borrowing in this country. This was never a lever anyone could pull to move the housing market. It was a bargaining chip, and it got spent on something that photographs well — "superannuation shouldn't be gambled on property" is a much easier sentence to sell than the actual scale of the problem it claims to solve.

What's Grandfathered and What Isn't

Existing LRBAs are untouched. If your SMSF already owns geared property, nothing changes for you. Commercial property LRBAs are also unaffected — this is specifically about residential.

The 2019 Precedent Everyone's Forgetting

What I find more interesting than the policy itself is the pattern. We saw an almost identical proposal from Bill Shorten in 2019. It never became law — but the major banks pulled their SMSF residential lending products before it did, purely on the expectation that it would. The policy risk alone was enough to kill the product. I'd expect something similar this time, possibly faster, because this one has actually passed.

What Trustees Should Actually Do Now

If you've been sitting on an SMSF property strategy and haven't signed anything yet, the operative question isn't "will the law pass" — it already has. It's "will a lender still write me this loan before the window closes." That's a conversation to have now, not in July.

Why This Reform Won't Change Much for Most Trustees

For everyone else — the vast majority of SMSF trustees who were never going to gear into residential property anyway — this changes nothing. It's a policy that will be cited in headlines for months and felt by almost no one, which tends to be the actual definition of a symbolic reform.