Parliament has passed a ban on new SMSF borrowing (LRBAs) for residential property, commencing around mid-August 2026. A compliant pathway remains. Our Unit Trust pathway is a separate, non-LRBA approach that keeps your SMSF's tax and asset-protection advantages intact — supported by a written opinion from senior counsel, with compliance confirmed for you by your own licensed advisers.
The new law targets the Limited Recourse Borrowing Arrangement (LRBA) route for residential property. The Unit Trust pathway on this page is a separate, non-LRBA structure that sits outside the rule that's changing — so approved trustees can keep building.
The pathway directly affected by the new law.
A separate, non-LRBA structure that keeps your build moving.
Your SMSF stays the beneficial owner throughout. The Unit Trust holds the investment and channels the entitlements back to your fund. A Bare Trust holds legal title so a construction lender can take security — without breaching a single SMSF rule.
Same trustees, same trust deed, same compliance rails. Your fund remains the beneficial owner of the asset.
Connects your SMSF to the lender via the Bare Trust, while returning entitlements to your fund at the concessional rate.
Lets the construction lender take security in the ordinary way, without breaching SMSF borrowing rules.
Approved progressive-draw funding aligned to your building milestones, from slab to handover.
Because your SMSF stays the beneficial owner, the standard super rules and benefits keep applying — nothing carved out, nothing compromised.
Investment income through the Unit Trust is taxed at your SMSF's concessional 15% rate, in line with standard fund operations.
Assets held beyond 12 months attract the one-third CGT discount — an effective rate of around 10% on eligible gains.
In pension phase, earnings and capital gains may be entirely tax-exempt under standard superannuation law.
Property held in the structure carries the same strong protection from personal creditor claims as any other super asset.
Works with your existing trust deed. Binding death-benefit nominations and beneficiary planning stay in place.
Trustees keep full discretion over investment decisions, consistent with your SMSF investment strategy.
The structure rests on a senior counsel opinion and a purpose-drafted trust deed. Because the right answer depends on your fund's circumstances, your own licensed advisers confirm it for you, in writing, before anything proceeds.
The Unit Trust structure is supported by a written opinion from senior counsel and built around a specific trust deed drafted for these requirements.
Your own SMSF lawyer and auditor confirm compliance for you before anything proceeds. We don't determine that ourselves, and we don't give legal or tax advice.
The pathway is a separate, non-borrowing structure. It doesn't rely on a new SMSF LRBA, so the residential-borrowing change doesn't reach it in the same way.
We bring licensed brokers, SMSF lawyers and accountants together and project-manage the timeline. Every regulated recommendation comes from a licensed professional engaged by you.
Six considered steps, each handled by the right specialist. We coordinate the legal, accounting and broking team so you only make the decisions that matter.
NDA signed, lawyer and accountant intake forms completed, and our partnered broker engaged.
Forms signed, broker engagement begins, lawyers countersign the NDA, and land and build contracts are prepared.
The broker secures construction-loan pre-approval before the Unit Trust is incorporated.
Your accountant confirms whether a Bare Trust is required and which party establishes it.
Lawyers issue the cost agreement by DocuSign; establishment proceeds on unconditional loan approval.
Lawyers prepare the Unit Trust documents and incorporate the trustee company. Construction begins.
A short discovery call. We talk through your current SMSF, the property you want to build, and whether the Unit Trust structure is the right call given the new rules. No obligation, no hard sell.
The change applies to borrowing. It bans new limited recourse borrowing arrangements (LRBAs) for residential property held inside an SMSF.
The Unit Trust pathway we coordinate is a separate, non-borrowing structure — it does not rely on an LRBA, so the LRBA change does not reach it in the same way.
Every fund is different, so we don't ask you to take our word for it. We coordinate a review of your structure with your own licensed SMSF adviser, lawyer and accountant, so its suitability and compliance are confirmed independently for you, in writing.
On 23 June 2026 the government agreed to ban new LRBAs for residential property, as part of a deal to pass its wider tax package. The legislation has since passed Parliament and received Royal Assent.
The ban commences roughly 45 days after assent — around mid-August 2026. It applies only to new residential-property borrowing from that date. Borrowing to buy commercial (business real property) is not affected.
The change is prospective. Based on the legislation as passed:
Existing LRBAs are grandfathered; refinancing a pre-commencement residential LRBA is still permitted; and an acquisition where contracts were exchanged before commencement is protected, even if settlement happens afterwards.
What is not yet fully settled is exactly how far a transaction must have progressed by the commencement date to qualify — so the timing of your specific contract is something to confirm with your licensed adviser and lawyer.
The change is narrow. After commencement, an SMSF can still borrow under an LRBA to buy business real property (such as commercial premises). It can also still buy residential property outright where it has the funds and that fits the fund's investment strategy.
What is no longer available is a new LRBA to buy residential property. Whether any of these options suits your fund is a question for your licensed professionals.
In most cases you use your existing SMSF. We'll walk through your specific situation on the call and confirm whether any adjustments are needed.
There are establishment, broker and legal fees involved at the relevant stages. Because every situation is different, we share specific numbers on the discovery call.
That way we can talk through what you're getting at each step, rather than handing you a bare list of numbers.
Timing depends on your lender pre-approval, the property you're buying, and how quickly the legal documents move. We'll give you a realistic timeline once we understand your situation.
The Unit Trust structure is supported by a written opinion from senior counsel and is built around a specific trust deed drafted for these requirements.
Because the position depends on your fund's circumstances, your own SMSF lawyer and auditor confirm compliance for you before anything proceeds. We don't determine that ourselves, and we don't give legal or tax advice.
Security and drawdown are arranged by the lender and documented by your SMSF lawyer, so your fund's compliance is preserved.
We coordinate the broker and lawyer to put that in place. The structuring and the compliance sign-off sit with them.
A quick chat — no pressure, no obligation. We'll cover whether this pathway fits your SMSF and timeline, and what the next step looks like.