The SMSF Association has conceded its push to have newly built properties excluded from the ban on the use of limited recourse borrowing arrangements (LRBA) for the purchase of residential property that is not business real property has little chance of being successful.
“I suspect it is going to be very difficult to convince the government to do that. It doesn’t need the support of the Greens to get that amendment through. The coalition has made it very clear that it will support this amendment to allow new properties to be acquired under LRBAs,” SMSF Association chief executive Peter Burgess told attendees at the Class Ignite 2026 conference in Sydney last week.
“It’s unlikely that the government will agree to that given it needed the support of the Greens to get its budget measures through.”
Adding to his argument was the Greens’ actual motivation to call for the LRBA ban.
“One of the concerns the Greens have about LRBAs was the property spruiking which it saw increase as a result of the budget changes and that’s around new property, so you wouldn’t think [the party would be] in any mood to agree to an amendment to allow new properties to be acquired under LRBAs,” he noted.
“So it’s going to be hard to get this one through. Still, we’re doing what we can to put some pressure on the government to make that amendment.”
Burgess took the opportunity to again point out how rushed and inadequate the process was that led to the change in LRBA rules.
“What is clear is that the government has not properly modelled the indicators that this change will have on the supply of housing in this country,” he said.
“We saw some figures come out suggesting there were about 4000 LRBAs set up in the [2026 income] year. That figure seems to be grossly underestimated.
“Some of the industry figures we’ve seen has it closer to 16,000 LRBAs [used to purchase residential properties].”
The SMSF Association has been working with a number of real estate industry bodies to have new properties excluded from the LRBA ban ever since it was announced.