The current state of play with LRBAs

While the Government has clearly rejected the recommendation of the Financial System Inquiry to stop geared property acquisitions by super funds, it has, however, also requested that the ATO and the Council of Financial Regulators monitor leverage and risk in the superannuation system.  The Government has requested that they report their findings in 2019.

Given that the most recent SMSF statistics is that 2.6% of SMSF assets are assets under LRBA arrangements, there really seems to be no present possibility that LRBAs will distort the property market generally or impose systemic leverage risks for the superannuation system.

The most recent SMSF statistics were released September 2015 by the ATO which valued SMSF fund assets held under LRBAs as being $15.6 billon – however this figure must be compared to total SMSF assets of $590 billon.