Evelyn Allen
Evelyn Allen
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Let’s Talk About the Advantages to Holding Property Inside an SMSF

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Self-managed super funds (SMSFs) have become a very popular choice for Australian investors since superannuation was made mandatory in 1992. According to the stats, the number of self-managed super funds registered is over 1,000 every week.

Let’s talk about its other parameters in detail.

What is SMSF administration?

Self-managed superannuation funds (SMSF) have witnessed a drastic surge in its popularity as they give you the opportunity to manage your own fund.

But they come with myriads of regulatory and legislative requirements and thus, people ought to hire SMSF administration firms to keep on track and achieve the ultimate retirement aspirations.

Now, you know about the SMSF administration, so let’s talk about the advantages that you can enjoy in the case of holding a property inside an SMSF.

Advantages to Holding Property Inside an SMSF

1. Tax concessions is the biggest advantage of house inside SMSF

Where you hold an investment property in your own name, tax will broadly be payable based on your personal rate of tax, which could be as high as 46.5%.

Similarly, if you were to hold an investment property through a company, the tax rate is 30%.

Due to the concessional tax rate that applies to superannuation investment earnings, rent received by your SMSF will be taxed at a maximum rate of 15%.

Moreover, plus side to this is that when you reach the preservation age and start drawing pension from your SMSF, the rental income from your property becomes tax-free.

2. Protection against Against General Debt Recovery

Assets held in SMSF have protection against general debt recovery. This is one of the most imperative benefits of holding property inside SMSF.

For instance, when a trustee is declared bankrupt, they become classified as a disqualified person and therefore, will no longer be allowed to be a trustee of the SMSF.

When this happens, the fund is given six months to restructure, and the trustee must transfer the superannuation interest out of the SMSF.

3. Benefits of concessions for small business owners

If you are a small business owner, superannuation assets are not included when determining your eligibility for the generous small business CGT concessions that apply when you sell your business or retire.

So, by planning ahead, you can ensure that you better qualify for these concessions.

4. Diversification is too an advantage here

Diversification that leads to a super portfolio is also an advantage that you will enjoy in such a case. Your investment property or properties are not recommended to be 100% of your super fund.

A change in market conditions may require you to consider other investment options such as corporate bonds, shares, commercial real estate, and infrastructure.

When you diversify your assets, you can strengthen your super fund and generate less risk. Always seek expert advice from a financial advisor when you are considering updating your investment strategy.


Buying property through SMSFs is a relatively stable and low risk investment compared to other options, and can offer considerable returns.

More importantly, you are given more control over your property investment than you are with other options, and you can even gain access to significant tax efficiency.

so, hire a team of experts to help you with SMSF administration to yield you all the above mentioned profits.