For trustees who want direct residential property inside their SMSF, the 10 August 2026 borrowing ban changed the maths. Without a new residential LRBA, the fund needs to cover the full purchase price, stamp duty and costs, and still keep a buffer.
That sounds like a high bar, and for many funds it is. But it is not out of reach for everyone, and a brand-new property can make the timing work in your favour.
This is general information only. It is not personal financial or tax advice.
What the fund actually needs
A cash purchase needs more than the contract price. Budget for:
- The purchase price
- Stamp duty and transfer fees, which vary by state (some states offer off-the-plan concessions, so check whether an SMSF purchase qualifies)
- Legal, conveyancing and inspection costs
- A liquidity buffer for vacancy, rates, insurance, fund running costs and any pension payments
Your SMSF accountant can help you set a sensible buffer for your fund.
The levers for building the balance
Bring member balances together. An SMSF can have up to six members. Spouses with separate industry or retail fund balances can roll them into one SMSF, which can make the combined balance large enough to act. Check any insurance cover before rolling over, because it may be lost.
Concessional contributions. Employer contributions, salary sacrifice and personal deductible contributions all count, up to the annual cap. If your total super balance was under $500,000 at the previous 30 June, you may be able to use unused cap amounts from up to five previous years.
Non-concessional contributions. After-tax contributions, including the bring-forward rule that can allow up to three years' worth in one go, depending on your age and total super balance.
Downsizer contributions. If you are 55 or older and sell a home you have owned for at least 10 years, you may be able to contribute up to $300,000 each from the proceeds, outside the normal caps.
Contribution caps are indexed and change over time. Confirm current figures at ato.gov.au before acting.
Why new builds can help with timing
Off-the-plan and house-and-land purchases usually involve a deposit up front and settlement once construction finishes. That gap gives the fund time to receive contributions before the balance is due.
Because the fund is paying cash rather than using an LRBA, the LRBA's single acquirable asset rule does not apply. That makes separate land and construction contracts possible, provided the fund's deed and investment strategy permit it.
A clear warning, though: never sign a contract on the assumption that the cash will be there. If the fund cannot settle, it can lose its deposit. Your plan should show the cash available at completion under realistic assumptions, including construction delays.
A worked example
A couple in their early 50s hold $420,000 and $310,000 in two separate industry funds. They establish an SMSF and roll both balances in, giving the fund $730,000.
The fund buys a new townhouse for $620,000. With stamp duty and costs of about $25,000 (this varies widely by state), the total outlay is $645,000. That leaves an $85,000 buffer in cash and other liquid assets.
These figures are illustrative only. They are not a recommendation about how much of any fund should go into one property.
The trade-offs
- Concentration. In the example above, one property makes up almost 90 per cent of the fund. The fund's investment strategy must address diversification and liquidity, and an auditor will look at this.
- Running costs. SMSFs carry audit, accounting and administration costs that need to stack up against the benefits at your balance.
- Liquidity in retirement. A property cannot be sold in parts to fund a pension payment.
- Know who you are dealing with. ASIC has repeatedly warned about people pushing investors to switch into an SMSF to buy property. Advice to set up an SMSF should come from a licensed adviser looking at your whole position.
What to do next
- Get your numbers checked by an SMSF specialist accountant: combined balances, contribution strategy and the buffer your fund needs.
- Speak with a licensed financial adviser before rolling over or consolidating super, particularly if insurance is involved.
- When you are ready, compare new properties carefully. EWC sources new builds for SMSF buyers. Book a free call or explore more on the insights page.
General information only, not personal financial advice. Speak with a licensed adviser before acting.