Major Tax Reform Changes: What Property Investors Need To Know
Greens CGT & Negative Gearing Changes Explained | Beagl Summary
Major Property Investment Change Announced: SMSF Borrowing for Residential Property to End
The Federal Government has struck a deal with the Greens to secure support for its proposed tax reforms, and one of the most significant outcomes for property investors has flown largely under the radar.
Under the agreement, Self-Managed Super Funds (SMSFs) will no longer be able to borrow money to purchase residential property.
While existing arrangements will be protected and investors already using SMSF lending will be grandfathered, the door is set to close for future leveraged residential property purchases through SMSFs.
Why This Matters
For more than a decade, SMSFs have had access to a special exemption allowing them to borrow funds to purchase a single asset, including residential property.
That exemption is now being removed.
Moving forward:
✅ Existing SMSF property loans remain unaffected.
✅ Current contracts and transactions already underway will be protected.
❌ New SMSF borrowing for residential property will no longer be permitted once the legislation commences.
Investors will still be able to purchase residential property through their SMSF using available cash, but they will not be able to leverage borrowed funds to do so.
A Significant Shift for the Property Market
Although SMSF borrowing represents a relatively small percentage of total housing finance, the implications are far broader than the raw numbers suggest.
This change will:
Reduce a source of competition for residential property.
Impact investors who were planning to use superannuation as a vehicle to build leveraged property portfolios.
Potentially alter demand dynamics in certain investment-focused markets.
Force many future investors to reassess their acquisition strategies and ownership structures.
For years, SMSF lending has provided an alternative pathway for investors seeking to control larger assets using retirement savings combined with finance. That pathway is now effectively closing.
Why Has This Happened?
The Greens made ending SMSF residential property borrowing a key condition of supporting Labor's broader tax reform package.
The government agreed to the change in exchange for Senate support on its wider capital gains tax, negative gearing and trust taxation reforms.
The Greens have argued that removing SMSF borrowing will reduce competition from investors and improve opportunities for owner-occupiers and first-home buyers.
What Should Investors Do?
At this stage, investors considering an SMSF property purchase should seek advice urgently and understand how the proposed commencement dates may affect their plans.
The legislation is expected to pass Parliament this week, with transitional provisions and grandfathering arrangements applying to existing transactions.
The Bigger Picture
Regardless of your views on the policy itself, this is one of the most significant structural changes to property investment strategy we've seen in years.
Many investors have spent the last decade building acquisition strategies around the ability to leverage superannuation funds into residential property.
That strategy is now changing.
At Beagl, we'll be monitoring the legislation closely and assessing what this means for investors, SMSF buyers and the broader Perth property market as further details emerge.
If you've been considering purchasing through your SMSF, now is the time to understand exactly how these changes may impact your plans.
Book in a non-obligation call with Barry Pound today!
Read the full ABC News article here:
https://www.abc.net.au/news/2026-06-23/greens-cgt-negative-gearing-tax-changes-ndis/106831036
