As a trustee, you’re used to a new financial year bringing a new set of numbers to work through. This year brings more than most.
From 1 July 2026, contribution caps have risen, Division 296 has commenced, and a significant new restriction on residential property borrowing has come into force. Some of this is good news for your fund. Some of it needs a proper conversation before you act.
The Good News: Higher Contribution Caps
Indexation has pushed several key thresholds up for 2026–27:
• The concessional contributions cap has risen to $32,500, up from $30,000
• The non-concessional cap has risen to $130,000, up from $120,000
• The bring-forward limit is now $390,000 over three years, up from $360,000
• The general transfer balance cap has risen to $2.1 million
Your eligibility for the non-concessional cap and bring-forward arrangements depends on your total super balance as at 30 June 2026, so it’s worth confirming exactly where your fund stands before making a contribution decision.
Division 296 Has Now Started
The additional 15% tax on earnings linked to total super balances above $3 million officially began on 1 July 2026.
This tax applies to the individual member, not the fund itself, and it isn’t offset by the fund’s usual deductions or losses. If your balance is approaching, or already above, $3 million, this is worth modelling properly rather than waiting for your first assessment to arrive.
The End of Residential Property Borrowing
Perhaps the most significant change: new limited recourse borrowing arrangements for residential property are no longer permitted.
If your fund doesn’t currently hold a residential property LRBA, this simply closes off a strategy that was previously available. If you were planning to set up an SMSF specifically to borrow and buy a residential investment property, that door has now closed.
What This Means If You Already Have an LRBA
Existing arrangements are protected and don’t need to be unwound. If your fund holds a residential LRBA, you’re not required to do anything differently.
That said, refinancing an existing arrangement is an area where guidance is still developing, and it isn’t yet clear whether a refinance could be treated as establishing a new arrangement. Hold steady, and get specific advice before making any changes to an existing loan.
Time to Review Your Strategy
An SMSF strategy that made sense under last year’s rules doesn’t automatically make sense under this year’s. Between the higher caps, Division 296, and the LRBA changes, there’s a lot for trustees to weigh up.
If you’d like to go through what these changes mean for your fund specifically, get in touch and we’ll work through it together.
To book an appointment, contact our office.