The number of SMSFs holding limited recourse borrowing arrangements (LRBA) remained stable in 2019/20, while the percentage of assets tied up in those arrangements was unchanged, according to the recently released ATO statistical overview for the 2020 financial year.
The figures released by the ATO last week, based on SMSF annual reports, showed 11.3 per cent of SMSFs held an LRBA in 2019/20, down from 11.6 per cent in 2018/19, but up from 7.4 per cent over the five years from 2015/16.
In dollar terms, this equated to $50.3 billion in LRBAs with 96 per cent held in some form of real property, with Australian residential real property assets at $26.2 billion, or 3.5 per cent of total SMSF assets, and Australian non-residential real property assets at $21.96 billion, or 3 per cent of total SMSF assets.
In comparison, Australian residential real property assets held outside LRBAs totalled $38.27 billion and Australian non-residential real property assets totalled $70.7 billion.
The remaining 4 per cent of LRBA assets was distributed among Australian shares ($562 million), overseas real property ($47 million) and overseas shares ($40 million), while a further $1.4 billion of assets was listed under the heading of ‘other’.
The ATO noted a new label introduced in the 2020 SMSF annual return to record the number of real properties an SMSF held under an LRBA arrangement found 84 per cent of funds reported holding one property, 9 per cent reported holding two properties and 3 per cent reported holding three or more, while 5 per cent held no properties.
