Recently enacted legislation imposes new restrictions on the use of limited recourse borrowing arrangements (‘LRBAs’) by SMSFs.

LRBAs entered into on or after 10 August 2026 to purchase real property can now only be used to acquire business real property.

These changes do not apply if an SMSF:

• has already entered into an LRBA to finance a real property acquisition before 10 August 2026; or
• maintains or refinances that LRBA on or after 10 August 2026.

‘Business real property’ generally means land and buildings used wholly and exclusively in one or more businesses.