Speaking at the SMSFA Technical Summit on Wednesday, Peter Burgess, CEO of the SMSFA, said a delegation from the association met with the Greens late last month to discuss their position in relation to LRBAs and the reduction of the threshold to $2 million – two of the recommendations the Greens had put forward to the government if it wanted to garner their support to pass the bill.

“We provided [the Greens] with some statistical data to show that LRBAs pose no threat to the housing market and that they're not pushing up prices. It also shows that they pose no threat to the superannuation industry,” Burgess said.

“Australian residential property is valued at just under $12 trillion and LRBAs are valued at $56 billion, so they're just too small to pose a risk to the sector or the housing market. And the growth of LRBAs is not spiralling out of control, it's been quite subdued, particularly over the last five years and we explained that.”

Burgess said the association also provided information about how, in the right circumstances, and with professional advice, LRBAs can achieve good results for individuals.

“On the reduction of the threshold to $2 million we made it very clear there are significant design flaws with this tax and if it is reduced to $2 million it’s going to exacerbate issues for more people,” he said.

“While we're not expecting them to change their position, we hope that we put some doubt in their mind about their current position.”

Burgess said since the second reading of the legislation, there had been amendments put forward, which were due to be debated in the third reading, including one from Teals senator Kylea Tink on the calculation of earnings, and using deeming rates as well as CPI indexation.

“The amendment that Kylea Tink is putting forward is the amendment we have drafted on indexation but the one thing we didn't realise is that when it comes to the lower house, only the government can put forward amendments to tax rates, amendments to laws that change tax rates, and because of that, you see the Teals coming up with these recommendations which are skirting around the edges,” he said.

“[Independent senator] Allegra Spender has put forward some amendments as well which include an independent review [of the tax] and a report back by 1 July 2025 on the consequences of this tax. She's proposing an amendment that taxing unrealised gains not to be used in the design of future amendments of this Act.”

He added that Spender is also proposing a five-year deferral where tax does not have to be paid in certain circumstances for five years to try and help with liquidity issues.

“That doesn't solve the taxing of unrealised capital gains, it just defers the tax,” Burgess said.

“Things with Allegra have moved on a little bit since she put these amendments forward. She is now working with Senator David Pocock on amendments that address the taxation of unrealised capital gains.”