Grandfather existing LRBAs says SMSF Association

Mike Taylor

Managing Editor and Publisher

24 June 2026

The SMSF Association has expressed disappointment that self-managed superannuation funds have been disadvantaged by horse-trading between the Government and the Greens over the Budget Capital Gains Tax measures.

Further, the association wants existing Limited Recourse Borrowing Arrangements (LRBA) grandfathered.

SMSF Association chief executive, Peter Burgess said the Government’s concession to the Greens which will have the effect of banning SMSF access to limited recourse borrowing arrangements for residential property represents a clear departure from settled policy.

“If property spruikers and high-pressure sales tactics are the issue, the answer is to target that conduct directly and not trade away LRBAs investing in residential property just to secure passage of their Federal Budget tax measures,” Burgess said.

“LRBAs are a legitimate investment tool that, when used appropriately and under existing regulatory safeguards, allow individuals to invest in assets through their self-managed superannuation fund that they may not otherwise be able to do,” he said. “The problem is not the borrowing structure itself, but the conduct of those who aggressively market unsuitable property investments and make unrealistic claims about returns and retirement outcomes.”

Burgess said many investors and self-managed superannuation fund (SMSF) trustees have made legitimate financial commitments based on the existing rules.

“Any changes to LRBA rules should include appropriate consultation and grandfathering provisions or a substantially longer implementation period to ensure investors are not left high and dry midway through a significant financial commitment.”