Written

For

The

Australian

-

SMSF

property

investors

race

deadline

as

ban

kills

key

strategy

If you've been dreaming of buying an investment property inside your self-managed super fund with a bit of borrowed money, the clock is ticking — and it's ticking loudly.

Thanks to a last-minute deal between Labor and the Greens, one of the most powerful wealth-building strategies for retirement is being shut down. Buying residential property in an SMSF using leverage, then flicking the switch to tax-free rental income and capital gains after age 60, has been a go-to play for years. Not anymore.

The ban on SMSF property lending kicks in 45 days after the legislation gets royal assent, which puts the effective deadline somewhere around mid-August. And whether that deadline applies to contract date or settlement date? Still unclear.

If you don't already have an SMSF set up, I'd say you've probably missed the boat. Between establishing the fund, rolling over your super, getting loan pre-approval, finding a property, doing due diligence and exchanging contracts, six weeks is a serious stretch. If you already have an SMSF, you've got a fighting chance — but only if you move now.

That said, don't run around like a headless chicken. There are exemptions worth knowing about. Commercial property inside an SMSF with a loan is still on the table, and I expect this to be the next hot spot for investors, particularly small business owners who want to be their own landlord. After years of sluggish growth, commercial could finally have its moment.

Residential property in an SMSF is also fine if bought outright — expect a tilt toward cheaper regional markets as trustees adapt.

For everyone else, family investment companies are being touted by accountants, but tread carefully — the ATO's Part IVA rules are unforgiving. And with negative gearing disappearing and a 30 per cent minimum CGT looming, the property investing landscape has fundamentally shifted.