Can SMSFs Still Buy Residential Property in Australia?

Yes — SMSFs can still purchase residential investment property in Australia. The new borrowing ban does not prohibit SMSF ownership of residential property. What it prohibits is new borrowing (via a Limited Recourse Borrowing Arrangement) to fund that purchase.

If your SMSF has sufficient cash or assets, you can still buy residential property. Here is exactly what is and is not permitted.

What Is Still Allowed

• Purchasing residential investment property using existing SMSF cash or assets
• Holding existing residential property already owned by the fund
• Maintaining existing LRBAs for residential property (grandfathering expected)
• Receiving rental income from SMSF-owned residential property
• Selling SMSF residential property and reinvesting proceeds

What Is No Longer Permitted

• Establishing a NEW Limited Recourse Borrowing Arrangement to purchase residential property
• Using a new LRBA to refinance an existing residential property loan (seek specific advice)

Can My SMSF Still Buy a House?

Yes — with cash. If your SMSF has the funds, you can purchase a house as a residential investment property. The sole-purpose test still applies: the property must be for investment purposes and cannot be lived in by a fund member or related party.

Can My SMSF Still Buy an Apartment?

Yes — with cash. Apartments, units and townhouses remain available as SMSF investments, provided the purchase is funded from existing fund assets and the property meets all compliance requirements.

Can My SMSF Still Buy a Townhouse?

Yes — with cash. Townhouses are permissible SMSF investments. The ban only affects the financing mechanism — not the asset class itself.

Can My SMSF Still Buy New Property?

Yes — with cash. Newly constructed properties and off-the-plan purchases remain permissible for SMSFs using existing fund assets. Note that off-the-plan purchases carry additional risks (developer insolvency, sunset clauses) that require careful due diligence.

Can My SMSF Still Buy Established Property?

Yes — with cash. Established residential property remains a permissible SMSF asset class. The restriction is purely on the borrowing mechanism.

What If My SMSF Does Not Have Enough Cash?

If your fund does not have sufficient assets to purchase residential property outright, your options include:

• Increasing member contributions over time to build the fund’s purchasing power
• Pivoting to commercial property, where borrowing via LRBA may still be available
• Investing in property-adjacent assets (REITs, property ETFs) while building cash reserves
• Accessing off-market residential properties at a discount to stretch available capital further

The Off-Market Advantage for Cash-Funded SMSF Purchases

For SMSFs buying residential property without leverage, price is everything. Off-market properties — acquired before they reach public listing portals — often trade at a discount to comparable listed properties. This discount can be the difference between a viable and non-viable SMSF acquisition when there is no borrowing to bridge the gap.

The Collings Off-Market Property Portal gives SMSF investors priority access to pre-market and off-market residential opportunities across Melbourne and beyond.

Whether you are navigating the SMSF borrowing ban, searching for your next off-market acquisition, or building a new SMSF property strategy, the Collings Property Platform gives you access to off-market opportunities, portfolio tracking, investment tools, and property insights powered by GeeVee AI. Join free today and start building your property future. collings.com.au/portal