From 10 August 2026, super funds can no longer borrow to buy a home or unit as an investment. If you already have a loan, you are protected. If you are mid-purchase, the key date is simpler than you might think — but you need to act now.
If you have been thinking about buying an investment property inside your self-managed super fund (SMSF) using borrowed money, there is an important change coming — and if you are already partway through a purchase, you may need to move quickly.
From 10 August 2026, an SMSF will no longer be able to borrow to buy residential property. Two pieces of good news upfront: if your fund already has a property loan, nothing changes for you; and if you are mid-purchase, what matters is the day you sign the contract — not the day settlement occurs.
What is changing
For years, SMSFs have been able to borrow to buy property through a limited recourse borrowing arrangement. A recent change to the law closes that door for residential property. From 10 August 2026, your fund can only borrow to buy property used in a business — commercial premises, a shop, an office or a factory. Borrowing to buy a house or unit to rent out will no longer be permitted.
If you are mid-purchase: the deadline that matters
The question we hear most often is: what is the actual cut-off — the contract date or the settlement date? It is the contract date. If you sign (exchange) contracts before 10 August 2026, your purchase is protected — even if settlement happens weeks or months later. That means an off-the-plan purchase that won’t be finished for a year is still fine, provided contracts are signed before the deadline.
You do not need your loan approved yet
You do not need your loan fully approved by 10 August. A contract that is ‘subject to finance’ still counts — a signed contract is a signed contract, even with a finance condition attached. Your loan can be approved and the money drawn down after the deadline. The thing that must happen before 10 August is signing the purchase contract.
What to do now
• If you are buying, aim to sign contracts well before 10 August. Give yourself a buffer — do not leave it to the last day.
• Let us get your fund’s structure ready first. Your SMSF buys the property through a special holding trust that must be set up and dated correctly before you sign. We can put this in place quickly — talk to us early.
• Do not wait for the banks. When SMSF borrowing last came under pressure in 2018, the major banks left the market well ahead of any legal change. Residential SMSF lending is already limited to a handful of specialist lenders — expect capacity to tighten as 10 August approaches.
• Ask for a longer settlement period. With a rush of applications expected, loan approvals may take longer than usual. A longer settlement gives your loan time to come through.
One to watch — brand-new property from a developer
There is one technical question still unresolved. There is an argument that a brand-new property bought directly from a developer might — in narrow circumstances — still qualify for SMSF borrowing, because at the point of purchase it is the developer’s business stock. Do not count on this. It is untested, runs against the clear intent of the change, and may be shut down by the tax office or further legislation. We are watching it closely and will update you if the position becomes clearer. For now, treat it as a possibility — not a plan.
If you are considering buying property inside your SMSF — or you are already mid-purchase — please contact us before you sign anything. Time is short, the structure needs to be right before contracts are exchanged, and lender capacity may tighten quickly. Come to us first.