In 2026 the Federal Government banned new borrowing to buy residential property inside self managed super funds. If that ban ended your plan, it probably feels like bad news. Here is the other way to look at it.
Think about what the ban actually ended. The old strategy meant borrowing inside your super to buy a property, then negatively gearing it: running a loss each year on interest and costs, and hoping capital growth would outrun the debt. That approach put a lender between your super and your retirement. Repayments continued whether the market rose or not, interest rates moved whenever they liked, and one heavily geared property often carried the whole plan on its back.
The ban forces a better question: what does property in super look like without debt? It looks like this. Your fund buys a share of a quality residential property outright, as tenants in common, using cash it already holds. Ownership is split into 5 per cent tranches, so from $75,000 your fund goes on the title. Rent starts arriving once the property is built and tenanted, paid in proportion to your share, with a target income of around 9 per cent a year*. No lender, no repayments, no interest rate risk. And because tranches are affordable, you can spread your money across several properties instead of betting everything on one.
Positive income once the property is tenanted, instead of engineered annual losses. That is not a consolation prize for losing the borrowing option. For retirement money, it is arguably the better strategy, and it was available all along.
See the difference in your own numbers. The calculator compares a debt free tenants in common portfolio against the old borrowing approach and a super only baseline, side by side, using your age, balance and income. It takes about two minutes.
*Target based on the program's historical and modelled performance. Returns are not guaranteed and may vary. General information only - it does not take into account your objectives, financial situation or needs. Consider seeking advice from a licensed financial adviser.