If you have been putting off a decision about investment property or superannuation strategy, the rules you were working from are no longer current. Several changes have come through since mid-2026, and they affect borrowing inside super, how much you can contribute, the tax on very large balances, and when your employer pays super. Understanding what has shifted is a useful starting point before you talk to a licensed adviser.
1. New Residential SMSF Loans Are Gone
From 10 August 2026, trustees are no longer permitted to use Limited Recourse Borrowing Arrangements (LRBAs) to acquire residential property within an SMSF. The legislation is the Treasury Laws Amendment (Tax Reform No. 1) Act 2026 (ato.gov.au has the underlying SIS Act provisions).
The legislation generally protects residential property LRBAs established before the commencement date, meaning existing borrowing arrangements are expected to continue under grandfathering provisions. If you already have a residential LRBA in place, it continues on its current terms.
The ban targets residential property only. Commercial property, defined as Business Real Property under section 66(6) of the SIS Act, remains eligible for new LRBAs after the ban takes effect. For commercial, the property must meet the strict business real property definition, and mixed-use property, vacant land, or property with private or residential use may need careful review before an LRBA is entered into.
For trustees who still want to hold residential property inside their SMSF after the ban date, the available routes are a straight cash purchase by the fund, or the SMSF/unit trust structure, where the fund invests into a unit trust that holds the property and carries the borrowing. The latter can also fund construction, which a standard LRBA never could. These are things to discuss carefully with an SMSF specialist accountant and a licensed broker.
2. Contribution Caps Have Risen
From 1 July 2026, the concessional contributions cap is $32,500, per the ATO (ato.gov.au). That covers employer super guarantee contributions, salary sacrifice, and personal deductible contributions combined.
From 1 July 2026, the non-concessional contributions cap is $130,000. The bring-forward rule allows up to $390,000 over three years for eligible members. The threshold for accessing the full three-year bring-forward increases to balances below $1.84 million.
For anyone building super to fund a property purchase inside the fund, the higher caps mean more room to top up the balance each year. Whether those contributions make sense given your personal situation is a conversation for a licensed financial adviser.
3. The Transfer Balance Cap Is Now $2.1 Million
Indexation of the general Transfer Balance Cap occurred on 1 July 2026, increasing by $100,000 from $2 million to $2.1 million, per the ATO (ato.gov.au).
The general transfer balance cap represents the maximum amount of superannuation that can be transferred into the retirement phase, where earnings on these funds are tax-free. Individuals starting a pension for the first time on or after 1 July 2026 will be entitled to a personal Transfer Balance Cap of $2.1 million.
If a property sits inside an SMSF that is in pension phase, rental income and capital gains on that property are taxed at 0% up to the cap. That is the tax environment worth understanding when you are weighing an SMSF structure for property. The total super balance cap, which gates non-concessional contribution eligibility, also now sits at $2.1 million, per the ATO.
4. Division 296: A New Tax on Balances Above $3 Million
Both the relevant bills passed Parliament on 10 March 2026 and received Royal Assent on 13 March 2026. As a result, Division 296 tax is now law and commenced from 1 July 2026.
Division 296 introduces an additional personal tax on certain superannuation earnings where an individual's Total Superannuation Balance exceeds defined thresholds. For total super balances between $3 million and $10 million, an additional 15% Division 296 tax applies to realised earnings attributable to that slice, bringing the total tax on that slice to 30%. Division 296 tax for 2026-27 applies if your TSB is above $3 million on 30 June 2027.
Both thresholds are CPI-indexed: the $3 million threshold rises in $150,000 steps and the $10 million threshold in $500,000 steps.
Division 296 applies only to individuals, not superannuation funds or employers. For most readers this threshold is not yet relevant, but for those with larger SMSFs holding property, the rental income and any capital gains on an eventual sale now factor into a Division 296 assessment. That is something an SMSF specialist accountant needs to model before a purchase decision is made.
5. Payday Super Changes How Employer Contributions Flow
From 1 July 2026, under Payday Super, the maximum contribution base moves from a quarterly to an annual calculation, changing how employer contribution limits are applied. More broadly, Payday Super requires employers to remit super at the same time as wages rather than quarterly.
For investors and SMSF trustees, this matters for two reasons. First, contributions flow into the fund more regularly, which means the fund's cash position is more predictable for covering LRBA or unit trust loan repayments. Second, if you are self-employed or run a business and contribute for yourself, the compliance rhythm has shifted. A registered tax agent or SMSF accountant can confirm how the new timing rules apply to your specific setup.
What to Do Next
The five changes above do not all point in the same direction. Some open up room (higher contribution caps, a larger pension cap). One closes a door that many investors relied on (the residential LRBA). Division 296 adds a new layer of complexity for larger balances. Here are three concrete steps:
- Get your SMSF trust deed and investment strategy reviewed. If your fund's strategy referenced residential LRBAs as a permitted tactic, that section needs updating to reflect the legislative change. An SMSF specialist accountant can do this and confirm whether your existing arrangements are properly documented for grandfathering purposes.
- Talk to a licensed broker about your options. Whether you are looking at a straight cash purchase inside the fund, a unit trust structure, a commercial LRBA, or a standard residential investment loan held personally, a broker who works with both personal and SMSF lending can map out what is available to you at the time of writing.
- Connect with EWC to understand what property structures look like in practice. We work with investors, SMSF trustees, and first home buyers to source properties and coordinate with lenders. You can see the full range of what we do at /services or book a call at https://elitewealthcreators.com/booking/ to talk through where you sit.
The rules have shifted, but the fundamentals of building a property portfolio or an SMSF strategy have not. Clear structure, the right professional team, and a realistic view of costs and cash flow still matter most.
General information only, not personal financial advice. Speak with a licensed adviser before acting.