Property & Lending Update – June 2026
As the financial year draws to a close, the Federal Government has announced two significant changes that could impact property investors and Self-Managed Super Funds (SMSFs).
If you're considering investing in property—either personally or through your super—it's important to understand how these changes may affect your future plans.
🏡 Major Change 1: SMSFs Can No Longer Borrow to Purchase Residential Property
One of the biggest changes announced is the end of borrowing for new residential property purchases through Self-Managed Super Funds.
What does this mean?
Under the new legislation:
✔ Existing SMSF residential property loans are expected to continue under grandfathering provisions.
❌ New Limited Recourse Borrowing Arrangements (LRBAs) for residential investment property will no longer be permitted.
✔ SMSFs can still purchase residential property outright using available funds within the SMSF.
✔ Borrowing for an eligible commercial property through an SMSF remains available.
When does it start?
The legislation has now passed Parliament and is awaiting Royal Assent.
The new borrowing restrictions will commence 45 days after Royal Assent, which is currently expected to be around mid-August 2026.
If you're considering purchasing a residential investment property through your SMSF using finance, there is now a limited window to put your plans into action before the new rules commence.
Why the change?
The Government believes reducing leveraged residential property investment through superannuation will:
improve housing affordability
reduce investment risk within the superannuation system
encourage retirement savings to remain focused on long-term wealth creation.
For business owners, it's important to note that purchasing commercial premises through an SMSF remains a viable strategy.
📈 Major Change 2: Capital Gains Tax Reforms
The Government has also announced significant changes to Capital Gains Tax (CGT) for investment properties.
What's changing?
From 1 July 2027, the current 50% Capital Gains Tax discount is proposed to be replaced with a new inflation-indexation model together with a revised capital gains tax framework.
Current investment properties are expected to benefit from grandfathering provisions, meaning gains accrued before the commencement date should continue to be treated under the existing rules.
The reforms are intended to:
encourage investment in new housing
improve housing affordability
reduce tax concessions on existing residential investment property.
Exactly how the new system affects individual investors will depend on their circumstances and should be discussed with their accountant or financial adviser.
📅 Key Dates at a Glance
Date: Legislative Change
Mid-August 2026 (expected). New SMSF borrowing for residential property is prohibited (45 days after Royal Assent). Existing loans are expected to be grandfathered.
1 July 2027: New Capital Gains Tax rules commence.
1 July 2027 Broader investment property tax reforms, including negative gearing changes, are scheduled to commence.
What Should Investors Do?
While these reforms may seem daunting, they also present opportunities.
If you've been considering:
purchasing an investment property
establishing or using an SMSF
refinancing an existing investment loan
reviewing your investment strategy
Now is an excellent time to seek advice.
For clients who were planning to purchase residential property through their SMSF using finance, timing may be critical before the new legislation takes effect.
How We Can Help
At Best Foot Forward Mortgage Solutions, we work alongside accountants, financial planners and solicitors to ensure our clients have the right lending structure to support their long-term financial goals.
While we don't provide taxation or financial advice, we can help you understand your lending options and connect you with the right professionals to navigate these legislative changes.
Whether you're purchasing your first investment property, expanding your portfolio or reviewing your finance strategy, we're here to help.
Email: Shona Stephenson, Principal Mortgage Broker for Best Foot Forward Mortgage Solutions, shona@bestff.com.au, if you are based in Australia, and Adam Kingston, adam@australianexpatfinance.com, if you are an Australian Expat living abroad.
The information contained is general information only and does not consider your objectives, financial situation and needs. Please talk to us if you need a fast-tracked home loan, and we can help you find a lender that has the processes in place to process the application quickly. We strongly recommend that you do not act on any information provided on this website without individual advice from your trusted advisor. You should also obtain a copy of and consider the Product Disclosure Statement for all financial products before making any decision.
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