For many years, SMSFs have been able to borrow to purchase property through a Limited Recourse Borrowing Arrangement (LRBA).

Under the new rules, borrowing will only be permitted for business-related property, such as commercial premises, offices, factories and retail spaces.

Borrowing to purchase a residential investment property, such as a house, apartment or unit, will no longer be allowed from 10 August 2026.

One of the most common questions we're hearing is whether the deadline applies to the contract date or settlement date.

The answer is simple: it's the contract date.

If contracts are signed before 10 August 2026, the purchase can proceed under the current rules, even if settlement takes place weeks or months later.

This is particularly important for off-the-plan purchases, where settlement may not occur for an extended period. As long as contracts are exchanged before the deadline, the transaction remains protected.

Another point causing confusion is finance approval.

Your SMSF loan does not need to be formally approved before 10 August 2026.

A contract signed before the deadline, including one that is subject to finance, will still qualify. Loan approval and funding can occur after the deadline.

The critical step is ensuring the purchase contract is signed before 10 August.

If you're considering purchasing residential property through your SMSF, early preparation will be essential.

Sign contracts early
Avoid leaving things until the last minute. Giving yourself additional time can help reduce pressure and minimise the risk of delays.

Ensure your SMSF structure is ready
Before signing a contract, the correct SMSF holding trust structure must be established and documented. This needs to be in place before the purchase proceeds.

Don't wait for lenders
As regulatory changes approach, lender appetite can shift quickly. Residential SMSF lending is already limited to a small number of specialist providers, and capacity may become increasingly restricted as the deadline draws closer.

Consider negotiating a longer settlement
With increased demand expected, approval timeframes may extend. A longer settlement period can provide additional breathing room while finance arrangements are finalised.

There is ongoing discussion around whether certain brand-new properties purchased directly from developers may, in limited circumstances, still qualify for SMSF borrowing.

At this stage, the position remains unclear and untested. It also appears to run against the broader intention of the legislation.

For now, it should be viewed as a possibility rather than a strategy. We will continue monitoring developments and provide updates as more guidance becomes available.