Australia’s Self-Managed Super Fund landscape is entering a significant period of change.
In June 2026, the Australian Government announced plans to ban new Limited Recourse Borrowing Arrangements (LRBAs) used by superannuation funds to acquire residential property. Existing arrangements will remain in place, with a transition period for investments already underway.
The change does not remove the ability of SMSFs to invest in property. What it does change is one of the traditional pathways used by SMSF trustees to gain residential property exposure through borrowing.
This raises an important question:
If SMSF trustees continue to value residential property as a long-term investment, but borrowing to acquire individual properties becomes restricted, where will they look next?
At Black Tie, we believe professionally managed property investment funds can play an increasingly important role.
The Numbers Show the Opportunity
Australia’s SMSF sector continues to grow.
Recent data shows approximately:
- 673,000 SMSFs
- 1.2 million members
- More than $1 trillion in retirement assets
- Around $63 billion invested in residential property
While SMSF borrowing represents only a small percentage of total residential property borrowing, property remains an important investment class for SMSF trustees.
The rules may be changing, but the demand for property exposure is not.
“For decades, Australian investors have turned to residential property for two fundamental reasons: the potential for long-term capital growth and regular rental income.
The opportunity now is to provide SMSF investors with access to these same investment objectives through professionally managed property funds, without the mortgage stress, tenant management and day-to-day responsibilities of owning an individual property.
We see this as an important evolution in how Australians can access property investment through their superannuation.”
— Caroline Macdonald, CEO, Black Tie
Property Exposure Without the Mortgage Stress
For many SMSF trustees, the attraction of residential property is straightforward: the potential for long-term capital growth combined with regular rental income.
However, direct property ownership also brings:
- Mortgages and interest costs
- Large deposits
- Tenant management
- Maintenance and repairs
- Insurance and rates
- Compliance and administration
Through professionally managed property investment funds available on the BT Asset Hub, eligible SMSF investors can access property opportunities without requiring the SMSF to take out a mortgage to purchase an individual residential property.
No mortgage. No tenants to manage. No maintenance calls.
Instead, experienced fund and asset managers manage the underlying investments.
Depending on the individual fund, its strategy and performance, investors may have the opportunity to participate in potential capital growth while receiving regular income distributions, including quarterly distributions where provided under the relevant fund structure.
Diversification Rather Than a Single Front Door
Direct property ownership can also create concentration risk.
An SMSF purchasing one residential property may have a substantial percentage of its retirement capital exposed to:
- One property
- One suburb
- One local market
- One leveraged asset
Professionally managed property funds can provide a different approach, potentially offering exposure to multiple properties, developments and investment strategies.
For SMSF trustees, this creates an opportunity to consider property as part of a broader, professionally managed investment strategy rather than concentrating retirement capital into a single leveraged asset.
Same Investment Ambition. A Different Pathway.
Australia has approximately 673,000 SMSFs, 1.2 million members, more than $1 trillion in assets and around $63 billion already invested in residential property.
The Government’s proposed changes may alter how some SMSFs access residential property, but they are unlikely to remove its long-standing attraction as an investment class.
Through the BT Asset Hub, eligible SMSF investors can explore professionally managed property investment funds offering potential exposure to capital growth and regular income distributions, without directly taking on a residential mortgage.
No mortgage stress. No tenants. No maintenance calls.
Same investment ambition. A different pathway.
Important Information: This article is general information only and does not constitute financial, investment, legal, tax or superannuation advice. SMSF trustees should obtain independent professional advice and consider their fund’s investment strategy before making any investment decision. Investment returns, capital growth and distributions are not guaranteed.