The Finance Brokers Association of Australia (FBAA) is calling on brokers to move quickly and contact affected clients as sweeping changes to self-managed super fund lending take hold, following legislation the industry body says was passed without consultation.
FBAA CEO Leo Gagic (pictured) said the sector now faces a fundamentally different landscape.
"Brokers must accept that a new world has arrived in regard to SMSF residential lending," Gagic said.
According to Gagic, the changes — alongside reforms to negative gearing and capital gains tax — were "rushed through parliament with no industry consultation," leaving both borrowers and brokers needing to adapt quickly.
Gagic said the FBAA had cautioned against the reforms before they passed and warned the consequences could be significant.
"There is already confusion and distress," he said, adding there is "a strong likelihood that both homeowners and renters will incur losses and higher prices as a result of legislation that won't help solve the housing crisis in any meaningful way."
The government has characterised the impact differently: Treasurer Jim Chalmers said SMSFs account for less than 1% of residential property borrowing overall, and under 0.5% of new lending annually, estimating the ban would add roughly $50 million to the budget bottom line.
From around 10 August — 45 days after the bill receives assent, per Savings.com.au, meaning the exact cut-off could still shift depending on when assent is granted — new residential lending and limited recourse borrowing arrangements (LRBAs) for SMSFs will effectively cease.
However, Gagic noted that avenues remain open elsewhere. Commercial lending through SMSFs is unaffected, and residential refinancing may still be possible under grandfathering provisions for existing arrangements. Specialist lenders, he said, are already working to support brokers and borrowers navigating the transition.
Gagic said brokers have a critical role to play as clients adjust to the new rules.
"Finance and mortgage brokers will be at the forefront of helping borrowers through these changes," he said, urging brokers to "be proactive and contact affected clients."
With the reforms taking effect in a matter of weeks, Gagic suggested demand for broker expertise is likely to grow.
"Impacted clients will rely on the trusted assistance and guidance offered by brokers more than ever before," he said.
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