Off-the-plan purchases have historically been popular with SMSF investors seeking new builds, depreciation benefits and lower entry prices in growth corridors. Following the 2026 SMSF residential borrowing ban, the picture has changed significantly.

What the Ban Means for SMSF Off-the-Plan Purchases

Off-the-plan residential properties — whether apartments, townhouses or houses — are classified as residential property. New SMSF LRBAs for off-the-plan residential purchases are prohibited under the proposed legislation. The ban applies regardless of whether the property is new or established, off the plan or complete.

Additional Complexity: Off-the-Plan and SMSF Rules

Off-the-plan purchases carry additional complexity for SMSFs beyond the borrowing ban. SMSF trustees cannot live in or use a residential investment property — this remains unchanged. The property must be maintained as a pure investment. Settlement risk on off-the-plan purchases (where valuations may fall between contract signing and settlement) is amplified without the buffer of leverage.

Can an SMSF Buy Off-the-Plan Without Borrowing?

Yes — if your SMSF has sufficient cash at settlement. However, the combination of the borrowing ban and the inherent settlement risk of off-the-plan contracts makes this a higher-risk strategy for most SMSF investors in 2026.

Frequently Asked Questions

Are off-the-plan properties treated differently from established properties under the ban?

No. The borrowing ban applies to all new SMSF residential LRBAs regardless of whether the property is new or established.

What if I signed an off-the-plan contract before the legislation was announced?

Contracts signed before the legislation commencement date may be subject to transition provisions. Seek urgent legal and SMSF advice for your specific situation.

What is the best alternative for SMSF investors who were planning off-the-plan purchases?

Commercial property (where SMSF borrowing remains available) or outright residential purchases using SMSF cash are the most common alternatives being considered.

Access Off-Market SMSF Investment Opportunities

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