SMSF Growth Hits a Record in FY2026: What It Means for Property

The ATO's latest quarterly statistics confirm that 2025-26 was a record year for self-managed super funds. More than 50,000 new SMSFs were established over the financial year, including 12,264 in the June 2026 quarter alone, the largest quarterly intake the sector has recorded. It is the third consecutive year of near-record growth.

The scale this has built is significant. As at 30 June 2026 there were around 680,000 SMSFs in Australia, holding combined assets of roughly $1.107 trillion for more than 1.24 million members. With total Australian superannuation assets at roughly $4.4 to $4.8 trillion, the sector now represents approximately 23 to 25 per cent of the money Australians hold in superannuation, the second-largest segment behind APRA-regulated funds.

For anyone weighing up whether to set up a fund, or already running one, that growth is worth understanding where property is concerned. The sector's appeal for property has not disappeared, but what an SMSF can actually do with property changed materially on 10 August 2026.

Why so many funds are being set up

A few forces show up consistently in the new-entrant data, together explaining why establishment numbers keep climbing rather than levelling off.

• Control. Trustees choose the specific assets the fund holds and when they are bought or sold, rather than sitting in a pooled option inside a large fund.
• Cost at scale. Consolidating several smaller balances into one fund can make the fixed costs of running an SMSF, such as audit and administration, worthwhile in a way a single small balance cannot.
• Faster-building balances. With the Superannuation Guarantee now at 12%, balances are growing more quickly, bringing more people to a level where taking direct control starts to make sense.
• Younger trustees. People aged 35 to 44 account for the largest share of new members, and six in ten new trustees aged 35 to 49 are first-time trustees, not people rolling an existing fund over.

Property's enduring pull

Direct property investment remains one of the strongest reasons trustees give for setting up a fund. A large APRA-regulated fund does not let a member choose an individual investment property; an SMSF does, which is the control point above applied to the asset class Australians know best.

That appeal has not gone away, but what has changed is the range of ways a fund can act on it. New entrants especially need to understand that range accurately before committing to a property strategy.

What changed on 10 August 2026

Under the Treasury Laws Amendment (Tax Reform No. 1) Act 2026, which received Royal Assent on 26 June 2026, SMSFs can no longer enter a new limited recourse borrowing arrangement (LRBA) to acquire residential property from 10 August 2026. The change was agreed between the federal government and the Greens as part of passing the broader tax reform package.

LRBAs entered into before that date are grandfathered and continue on their existing terms. They can generally still be refinanced on similar terms, though increasing the loan or changing the security can turn a refinance into a new arrangement.

What an SMSF can still do with property today

The ban is narrower than it is sometimes assumed to be. Three things remain true for a fund considering property right now.

• Cash purchases are fully open. A fund with sufficient balance can still buy residential property outright, without borrowing, at any time. This was never restricted and is unaffected by the August 2026 change.
• Business real property borrowing is still open. A new LRBA can still be used to acquire business real property, broadly land and buildings used wholly and exclusively in a business.
• New residential borrowing is not. A new LRBA to buy residential property is no longer available from 10 August 2026, regardless of the fund's balance or the property's value.

What this means depending on where you sit

If you are considering setting up an SMSF now, a residential property strategy funded by borrowing inside the fund is off the table for any new arrangement. A cash purchase or a business real property acquisition remains available, and the record establishment numbers show plenty of trustees are still finding the structure worthwhile for those reasons alone.

If you are an existing trustee with a residential LRBA already in place, nothing changes for that loan. It continues on its current terms, and refinancing it on substantially similar terms remains available, but any change to the loan amount or security should be checked before it happens.

Either way, a decision this size should not be made from sector-wide statistics. Your balance, your other assets, and what you actually want the fund to hold all matter more than the average trustee's experience.

Speak to us about your circumstances if you are considering establishing an SMSF, or if you already run one and want to check where a property strategy now sits under the current rules.

Disclaimer: This article contains general information only and does not constitute financial, legal or tax advice. It has been prepared without regard to your objectives, financial situation or needs. Tax and superannuation laws change frequently, and the information in this article may not reflect the current law or may become inaccurate over time. Before acting on anything in this article, you should consider its appropriateness to your circumstances and seek advice from a registered tax agent or qualified adviser.