This page reads the change from the Australian Taxation Office's own guidance (QC 107811, published 28 July 2026) and the Treasury Laws Amendment (Tax Reform No. 1) Act 2026, rather than the coverage of it. It is general information about how the rules work, not personal advice about what any fund should do.
What changed on 10 August
From 10 August 2026, a self-managed super fund can only use a limited recourse borrowing arrangement to acquire real property if that property is business real property — in the ATO's words, an asset "wholly and exclusively used in one or more businesses." In practice, an ordinary residential investment property can no longer be acquired inside super using borrowed money.
The change sits in the borrowing rules, not the ownership rules. A fund can still buy residential property outright with its own cash, exactly as before. What it can no longer do is borrow to do it. The ATO is also explicit that the change applies "regardless of whether the lender is a bank, non-bank lender or related party." The identity of the lender does not create an exception.
The deadline is the contract, not the finance
The transitional relief turns on one thing, and it is not the thing most people assume. It does not turn on when finance is approved, when a loan is drawn, or when the property settles. It turns on whether a binding contract to acquire the property was exchanged before 10 August 2026.
The ATO gives a worked example: a fund that exchanges a binding contract before the date, has finance approved afterwards, and settles up to a year later is not caught by the change. Off-the-plan purchases are protected on the same basis. Ordinary later variations of the contract do not disturb that protection; only a change so significant that the fundamental terms no longer exist may be treated as a new arrangement. And an existing arrangement can still be refinanced after the date — a new loan on the same asset, with the same or a new lender.
For anyone relying on the transitional path, the practical point is narrow and time-sensitive: protect the contract exchange. Finance and settlement timing are secondary.
Business use has to last the whole loan
The quieter half of the guidance runs the other way, and it applies to the commercial property that can still be acquired with borrowing. Business-use is not a one-off test at purchase. The ATO says the asset "must continue to be business real property for the entire life of the LRBA." If a borrowed commercial property stops being used in a business partway through the loan, the fund has, in the ATO's words, "breached the law against borrowing and compliance action may apply."
There is a sensible limit. A property does not fail simply because it is between tenants — it "will not stop being business real property only because the owner is looking for a new tenant." It is abandoning the plan to lease, not an ordinary vacancy, that causes the problem. The consequence the ATO names is "compliance action," not a specified penalty — but the obligation is ongoing, and that makes borrowing inside super a position to maintain, not one to set and forget.
What this means for structuring
Read together, the rules leave clear routes standing: a cash acquisition, a purchase grandfathered by a contract exchanged before 10 August, a genuine business-real-property acquisition financed by an LRBA, and the refinancing of an existing arrangement. What closes is the ability to keep borrowing to acquire standard residential property, including a new residential build, after the date.
This is exactly the layer AeFin works in — architecting the credit so the acquisition is clean, the borrowing is genuinely limited recourse, the contract and the deadline line up, and the fund is never asked to do something the rules forbid. Whether a given asset or structure suits your circumstances is a question for your licensed financial adviser and your accountant. The structure around the loan is ours.
The two-minute check
If an SMSF property decision is live for you, the quickest way to see where you stand is the one-page check below. It walks the three questions that decide whether the change touches you — a contract already exchanged, residential and not yet exchanged, or genuine business real property — read from the same ATO guidance this page draws on.
Download the two-minute SMSF borrowing check (PDF)
General information only, not personal financial, tax, legal or credit advice. It reflects ATO guidance QC 107811 (28 July 2026) and the Treasury Laws Amendment (Tax Reform No. 1) Act 2026.