Trustees of a SMSF are prohibited from borrowing monies, except in limited circumstances, as prescribed by section 67 of the Superannuation Industry (Supervision) Act 1993 (SIS Act).  Regulated SMSFs are permitted to invest directly in residential and commercial property as part of their overall investment strategy. Trustees can, under certain conditions, per sections 67A and 67B of the SIS Act, borrow funds from third-party lenders if the SMSF doesn’t have sufficient funds to cover the capital cost. This borrowing arrangement is referred to as a Limited Recourse Borrowing Arrangement (LRBA)  Therefore, an LRBA involves an SMSF trustee taking out a loan from a third-party lender. The trustee then uses those funds to purchase a single asset (or a number of identical assets with the same market value) to...