Far more mortgages caught up in ‘rushed’ super ban than government claimed
New modelling has found that the federal government’s ban on using self-managed super funds (SMSFs) to buy a home will affect far more people than first suggested.
An Australian Finance Industry Association (AFIA) survey of its 150 members found they wrote more than 16,000 new SMSF loans for new and existing homes in the 2025-26 financial year – far higher than the government’s estimate of 4000.
Self-managed super funds have been used for far more home sales than what the government said. Joe Armao/The Age
Labor banned SMSFs from entering new borrowing arrangements for residential homes in June after striking an 11th-hour deal with the Greens’ to pass their tax reform package before parliament went on winter break.
The government pointed to Australian Tax Office data that estimates those arrangements account for a tiny proportion of residential borrowing.
“SMSFs, for example, are less than one per cent of total residential property borrowing and less than half a per cent of new residential borrowing each year,” Treasurer Jim Chalmers said in June.
“So, a small part of the market.”
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The AFIA has more than 150 members across the entire finance industry, including Commonwealth Bank, NAB, Westpac and Deloitte.
The association said its data suggests the scale of the impact of the ban may not have been fully understood when it was passed without consultation.
“This is not a small or marginal segment of the lending market,” AFIA chief executive Diane Tate said.
“The ATO estimate of 4000 per year is based on data that Treasury officials have acknowledged is around three years old.
“The policy was designed around an incomplete picture and supposedly a review conducted well over a decade ago.
Treasury did not answer how the government assessed the impact of the ban and reiterated the reforms would not impact any existing arrangements and will provide time to finalise arrangements currently underway.
“Multiple inquiries have raised concerns that limited recourse borrowing arrangements raise risks for superannuation investors,” the spokesperson said.
“Limited recourse borrowing arrangements account for less than one per cent of total residential property borrowing and less than 0.5 per cent of new residential borrowing each year on average.”
Treasurer Jim Chalmers’ tax reform passed parliament in June. Alex Ellinghausen
Tate called on the government to reassess the ban against the new figures and create a carve-out for new houses to encourage investment that boosts supply.
“This was a major market change introduced without proper consultation or clear transitional guidance, creating unnecessary uncertainty for lenders and Australians with transactions already underway,” she said.
Shadow housing minister Andrew Bragg said the new data showed the government failed to conduct any impact analysis when making a rushed deal with the Greens.
“SMSFs add significant new housing stock –16,000 just last year alone,” he said.
“This is higher than Chalmers’ statement of 4000 homes per year, based on data which is some three or more years old.
“Labor should get the details right for all Australians and support new housing – not cancel it.”
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