If your SMSF exchanged contracts before 10 August 2026, you hold something that no longer exists: the right to borrow in super for a residential property. The ban is in force, but grandfathered contracts proceed — it’s the contract date that counts, not settlement. For off-the-plan buyers settling months or years from now, that right is valuable, and it needs protecting.
What the grandfathering actually covers
- Contracts signed (exchanged) before 10 August 2026 — even if the loan wasn’t approved, or the building isn’t finished.
- Settlement can occur any time after the ban — the LRBA for that purchase can still be established at settlement.
- What it doesn’t cover: renegotiating onto a materially different deal, or a new purchase. The protection attaches to that contract.
The four risks between exchange and settlement
1. Valuation shortfall. You’re buying at 2026’s contract price with a valuation done at settlement. If it comes in low, the fund tops up the difference in cash. We test indicative valuations early so a gap is a plan, not a surprise.
2. Liquidity drift. Lenders want the fund holding a buffer after settlement. Markets move, contributions change — the buffer that worked at exchange needs re-checking well before settlement.
3. Lender exits. The SMSF panel is shrinking post-ban. The lender you assumed would write the loan may not be there; we keep the file placeable across those who are.
4. Sunset clauses. Off-the-plan contracts carry sunset dates both ways. Know yours — and get finance-ready far enough ahead that the developer’s timetable can’t squeeze you.
Six months out: the checklist
Confirm contract date evidence · indicative valuation · fund liquidity vs lender buffers · contribution top-up strategy with your adviser · lender shortlist re-tested · deeds reviewed. Settlement day should be boring.
Common questions
My contract was signed before 10 August but the loan isn’t approved yet. Am I safe?
The grandfathering turns on the contract (exchange) date, not on loan approval or settlement. A pre-ban contract can proceed through to settlement with an LRBA — but the loan still has to be approved on its merits, so preparation is what protects you.
Does this cover off-the-plan purchases settling in 2027 or 2028?
Yes — if the contract was signed before 10 August 2026, the settlement can be financed whenever it falls due. Off-the-plan buyers are the biggest group of grandfathered purchasers, and the long gap to settlement is exactly where the risks live.
What’s the biggest risk between now and settlement?
Valuation shortfall. If the property values below the contract price at settlement, the fund must cover the gap from its own liquidity — on top of the deposit and costs. A shrinking SMSF lender panel is the second risk: your preferred lender may not be writing these when settlement arrives.
When should the loan work start?
About six months before expected settlement — earlier if the fund’s liquidity is tight. That leaves time to fix contribution strategy, test valuations and switch lenders if appetite has moved.
Related: the ban, explained · refinancing an existing SMSF loan
General information only, not financial, tax or legal advice. SMSF decisions should involve your licensed financial adviser and accountant; we arrange the credit side alongside them. Rules current at 18 August 2026.
