SMSF residential lending ban will hurt retirement savings of working Australians

25 June 2026

Australia’s non-bank residential mortgage lenders are concerned the Government’s decision to ban new limited recourse borrowing arrangements (LRBAs) for residential property within self-managed superannuation funds (SMSFs) will disadvantage ordinary Australians, undermine retirement saving strategies and weaken competition in lending markets.

The industry says the measure is rushed, blunt, and inconsistent with the Government’s stated objectives to support housing affordability and promote retirement savings. The ban was agreed without consultation and includes a transition period of just 45 days after Royal Assent, leaving borrowers, lenders, brokers and advisers scrambling to manage the implications.

While existing arrangements will be grandfathered, urgent clarity is needed on pipeline transactions and whether refinancing will remain viable and workable in practice.

The latest data shows SMSFs currently hold around $75 billion in LRBA-supported assets, backed by $28.9 billion in debt, which equates to average gearing of just 39%. This is much lower than residential property lending outside superannuation. The Government has also acknowledged these arrangements represent less than 1% of total residential property lending and less than 0.5% of new residential property lending each year.

Read the media release here.