SMSF Property After the 2026 Borrowing Changes

SMSF property investment has changed significantly in 2026, but property has not disappeared from the SMSF landscape. The major change is the end of new residential Limited Recourse Borrowing Arrangements (LRBAs).

For anyone considering property in their SMSF, the question is no longer simply:

At properT network, we believe that is where the conversation needs to start.

SMSF Property Investment: Strategy Comes First

This is where we believe investors need to think differently. We don’t start with “What property can your SMSF buy?” We start with “What are you trying to achieve with your retirement savings?”

An SMSF isn’t set up simply to buy property. Its purpose is to build and manage retirement assets in a way that suits your circumstances, objectives, timeframe, risk tolerance, liquidity needs and broader financial position.

Property may form part of that strategy. It shouldn’t automatically become the strategy.

That’s the principle behind our Strategy Before Property philosophy. The right property depends on the strategy, not the other way around.

A Word of Caution on 13.22C Unit Trusts

Some investors are looking at a 13.22C unit trust as a way for an SMSF to hold residential property. It can have a role in the right circumstances, but it is not a replacement for the old LRBA model.

A 13.22C trust must meet strict conditions, and keep meeting them for as long as the SMSF holds units. Among other things, the trust generally can’t borrow, can’t have a charge over its assets, can’t lend money or invest in other entities, and can’t lease residential property to, or buy assets from, related parties. Breaching a condition, even later on, can have serious consequences for the fund.

Don’t Forget Cash Flow and Liquidity

One risk of focusing heavily on property is forgetting that an SMSF also needs liquidity. A property in an SMSF carries ongoing costs:

• Property management
• Council rates
• Insurance
• Maintenance
• Accounting and administration
• Tax obligations

The fund also needs enough liquidity to meet its obligations, including pension payments once members retire. This matters even more now: without borrowing, a residential purchase ties up a larger share of the fund’s capital in a single asset.

Using Your SMSF and Personal Strategy Together

Your SMSF is only one part of your financial position. You may also have your home, personal investment properties, investment debt, cash, shares and business interests.

Rather than looking at your SMSF in isolation, it’s useful to understand how your super strategy and personal investment strategy work together. With residential borrowing now closed inside super, some investors may find that property with leverage sits better in their personal name, using the equity they already have, while their SMSF plays a different role. For families, multigenerational SMSF planning adds another dimension.

What is each asset supposed to do for you?

The properT network approach

The property comes after the strategy. Anyone can buy a property. The challenge is knowing whether it’s the right property for your strategy.

SMSF Property Hasn’t Disappeared, It’s Changed

The rules on residential property borrowing have changed, and investors need to think beyond the old LRBA model. For some, residential property may still have a role, bought with the fund’s own capital or through a compliant structure. For others, commercial property, fractional investment, shares or other assets may be more appropriate.

There is no universal answer. What matters is understanding what you’re trying to achieve first, then deciding whether property has a role to play.

We don’t start with the property. We start with you.