The rates
| Year | Real property | Listed shares or units |
|---|---|---|
| 2026–27 | 9.35% | 11.35% |
| 2025–26 | 8.95% | 10.95% |
| 2024–25 | 9.35% | 11.35% |
Why it matters
A related-party limited recourse borrowing arrangement (LRBA) that follows the ATO's safe harbour terms in Practical Compliance Guideline PCG 2016/5 is treated as arm's length. If a loan is on more favourable terms, such as a lower rate, income from the asset can be taxed as non-arm's length income at the top rate.
What trustees should do
- Check your related-party loan rate for 2026–27 is at least the safe harbour rate, or that you can show the terms are arm's length another way.
- Keep a written loan agreement and pay on time, monthly.
- Stress-test the fund's cash flow with the SMSF property calculator; see also SMSF and business property.
Quick answers
What is the SMSF LRBA safe harbour rate for 2026–27?
9.35% for real property and 11.35% for listed shares or units.
What happens if a related-party loan is below the safe harbour rate?
Income from the asset may be treated as non-arm's length income and taxed at the top rate, unless the terms can be shown to be arm's length.
Sources
General advice warning. This article is general information only and does not take into account your objectives, financial situation or needs. Rules, rates and thresholds change; check the sources above. Consider the relevant PDS and our Financial Services Guide and seek personal advice before acting. FinForce is a Corporate Authorised Representative (No. 001241242) of Financial Force Pty Ltd, ABN 42 091 425 464, AFSL 238337.