Key Highlights

• Division 296 and the restriction on new property LRBAs apply from their respective 2026 commencement dates.

• Additional rollover powers, Trustee education, identifiable bank accounts and related levy changes remain proposed.

• The ATO estimated SMSF Assets at AUD 1.107 trillion for the June 2026 quarter.

• They should distinguish enacted rules from announcements and monitor official commencement and reporting guidance.

Australia's SMSFs held an estimated AUD 1.107 trillion across more than 672,000 funds in the June 2026 quarter, and 2026 has brought more change than any year in recent memory. Some of it is enacted law that binds trustees now; much of it is Government announcement that still requires legislation. Confusing the two is the single biggest risk for trustees trying to plan.

Property borrowing restricted — LAW

From 10 August 2026, under Schedule 5 of the Treasury Laws Amendment (Tax Reform No. 1) Act 2026 (Royal Assent 26 June 2026), a new limited recourse borrowing arrangement can only acquire real property if that property is Business real property under the SIS Act 1993. In effect, residential property can no longer be bought through a new LRBA. Grandfathering protects LRBAs established before 10 August 2026, refinancing of those arrangements, and binding contracts exchanged before that date. This is a restriction on new borrowing, not a ban on SMSFs owning residential property outright with their own funds.

Division 296 large-balance tax — LAW

From 1 July 2026 (the 2026–27 income year), Division 296 imposes an additional 15% tax on Earnings attributable to a total Superannuation balance above AUD 3 million, and a further 10% above AUD 10 million. The enacted regime taxes an adjusted amount of the fund's actual (realised) Taxable Income — not unrealised gains. It is assessed to the individual, the thresholds are indexed, and SMSFs must report relevant member earnings in the annual return from 2026–27.

ATO power to prevent rollovers — PROPOSED REFORM

Announced on 19 August 2026 as part of the "Protecting Consumers and the Promise of Superannuation" package, this measure would empower the ATO to prevent rollovers into new SMSFs where it is investigating fraud, financial abuse, misconduct or potential harm. It requires legislation and is not yet in force.

Mandatory trustee education — PROPOSED REFORM

The same package proposes requiring basic trustee education before SMSF registration, plus support for industry-led standards. It is an announcement pending consultation and legislation, not a current requirement.

Uniquely identifiable SMSF bank accounts — PROPOSED REFORM

The package also proposes requiring SMSFs to hold uniquely identifiable bank accounts to improve oversight and detection of misconduct. Again, this is announced rather than enacted.

Supervisory levy increase — PROPOSED REFORM

The Government proposes aligning the SMSF supervisory levy with fund establishment and increasing it for the first time since 2013, from $259 to $295. As a proposal, the higher figure is not yet payable.

CSLR reforms — PROPOSED REFORM

Also part of the August package, the Compensation Scheme of Last Resort reforms envisage a waterfall / tiered special-levy model, with SMSFs classified as tier-three payers in years when a special levy is required. The estimated individual SMSF contribution is no more than around $20 per leviable period, scaled to sector assets, and compensation would be limited to actual Investment losses for relevant AFCA determinations after 30 June 2027. These require legislation; SMSF members are not already paying a CSLR levy.

ASIC auditor enforcement — REGULATORY DEVELOPMENT

In media release 26-170MR (24 July 2026), ASIC reported action against 64 approved SMSF auditors in FY26 — 8 disqualifications, 3 suspensions, 10 sets of conditions and 43 cancellations, with 36 acted against in the first half of 2026. Auditors are gatekeepers for a sector ASIC describes as holding AUD 1 trillion in assets across more than 672,000 funds. This reflects intensified oversight, not broad non-compliance.

Shield and First Guardian response — REGULATORY DEVELOPMENT

Much of the August reform package responds to the collapses of the Shield Master Fund and First Guardian Master Fund. Treasury figures indicate almost 12,000 people and around AUD 1 billion in retirement savings were affected (some media cite about AUD 1.1 billion). ASIC alleges that some consumers were referred via lead generators and advisers and encouraged to establish SMSFs or roll over super to facilitate the investments, often through superannuation platforms. ASIC is investigating; these remain allegations, and not all affected money was held via SMSFs. In steps to support affected Australians (see ASIC 26-019MR), the regulator has continued its response, and a decade-long ban was reported against an adviser central to the investigation in April 2026.

Hypothetical example

A trustee reading the headlines assumes she must now complete trustee education and pay a $295 levy immediately, and that she is already being charged a CSLR levy. In fact, as at 9 September 2026 those are proposals, not law. What does bind her now is the residential LRBA restriction and Division 296. Distinguishing the two lets her plan without acting on measures that may still change. Illustrative only; not advice.

What trustees should watch next

Track Treasury consultation and any bills implementing the August 2026 package, ATO guidance on Division 296 reporting for 2026–27, the ATO SMSF Newsroom for LRBA updates, and ASIC's ongoing enforcement and its response to Shield and First Guardian. Commencement dates, thresholds and levy amounts can change as legislation progresses.

The bottom line

As at September 2026, two things are settled law — the residential LRBA restriction and Division 296 — while ATO rollover powers, trustee education, unique bank accounts, the levy rise and CSLR reforms remain proposals, and ASIC's auditor and fund-collapse activity is regulatory in nature. Keep the labels straight, and seek appropriately qualified professional advice where your fund is affected.