24/06/2026
This government is the gift that keeps giving 🙄
They've just announced sweeping changes to SMSF lending that would stop everyday Australians from buying a single residential investment property inside their self-managed super fund.
And it's being sold as a crackdown on the rich getting richer, the uber-wealthy finding loopholes. That's not what most SMSFs are used for. Most people only ever buy one.
I don't agree with the policy. I think SMSFs are great. They're heavily regulated, and done right, they can be really good for people. But set that aside, because the policy isn't even the part that worries me most.
It's the way they're doing it, because there are thousands of mum and dad investors about to lose their 10% deposit over this.
They've gone to a developer, bought off the plan, and used their SMSF as the vehicle. They've put down their 10%, and now they're waiting for the property to be built.
The bank won't confirm the loan as unconditional until about 90 days out from settlement. So if these rules come in while they're stuck in that waiting period, they'll get to settlement, and the bank legally won't be able to lend to the fund.
They won't be able to complete, and that 10% is gone.
A lot of people think they're only exposed for what they actually paid. You might have only put down 2%.
But most contracts revert to the full 10% the moment you default, so you're on the hook for the lot. On top of that, the developer can come after you for their resale costs, marketing, legal fees, and any shortfall if they sell it for less than you agreed to pay.
For the record, we don't do this kind of investing, and we strongly recommend against buying off the plan, because the lending environment is too volatile, and this is exactly the sort of thing that can go wrong.
If they'd brought this in over twelve months, everyone already committed could finish their purchase and move on.
Instead, it's being done in a way that's going to cost ordinary people their deposit when all they were trying to do was set themselves up for retirement.
What are your thoughts? Drop them in the comments
