Limited recourse borrowing arrangement (LRBA)
A special loan structure that lets an SMSF borrow to buy a single asset, where the lender's claim is limited to that asset.
- The asset is held in a separate holding trust
- Lender cannot claim other fund assets
- Since 10 August 2026, limited to business real property
How it works
The SMSF pays the deposit and costs, a lender funds the rest, and the property is held in a bare trust until the loan is repaid. If the loan defaults, the lender's recourse is limited to that property.
Current limit
Since 10 August 2026, new LRBAs can only be used to buy business real property, such as offices, shops, warehouses and some farmland.
Commercial property in an SMSF can still work well with borrowing. The structure, the lease and the lender all need specialist advice.
Common questions
Can I use an LRBA to buy residential property now?
No. New LRBAs are limited to business real property since 10 August 2026.
Are SMSF loans more expensive?
Usually, with higher rates and lower maximum LVRs than standard loans.
Related terms
Sources
General information only. It does not consider your objectives, financial situation or needs, and is not financial, credit, tax or legal advice. Rules change, so check current law and get advice from a licensed professional before acting.