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Philip Le

Self managed super funds (SMSFs) - Building your retirement on property

Self Managed Super Funds (SMSFs) generally offer benefits like being able to invest in assets, or use certain strategies, that may not be available to you in other types of Super funds. There’s a lot to love about investing in property, and bricks and mortar can be an especially rewarding asset in retirement.



A rental property can have a lot of pluses for retirees including potential long term capital growth, regular rental income and an abundance of tax benefits including lightly taxed profits on the sale of a property that is held for longer than 12 months.

Even better, there is a range of ways to add a rental property to your retirement portfolio.

Invest now to take advantage of negative gearing
  • One key plus of investing in property is the ability of landlords to offset loan interest charges plus other ongoing expenses against regular rental income. Where these costs exceed the rent return the property is said to be ‘negatively geared'.
  • Moreover, the ongoing losses generated by the property can be offset against a landlord's regular wage or salary income to generate valuable tax savings. It means the tenant together with the tax man can help you pay off the property during your peak income earning years.
  • Ideally, by the time you retire, the loan will be paid off and the property will generate a positive cashflow, giving you money to live on.
Invest in your retirement home now
  • Here's one possible option for retirement that you may not have considered. Invest in the property you'd like to retire to, rent it out in the interim and sell your current home for a tax free capital gain when you're ready to hang up your work boots.
  • It's a tax-efficient strategy that can boost your retirement savings and provide you with a retirement home purchased at today's prices.

Your Mortgage Choice home loan specialist can provide more details about how this can work.


How do SMSFs work?

In many respects, SMSFs work in much the same way as regular super funds. During your working life you and your employer make contributions to the fund. The money is invested so that over time you build a decent pool of savings for retirement.

Who can start a self-managed fund?

Just about anyone can establish a SMSF though there is a limit of up to four members per fund. There are various costs associated with setting up and running a SMSF so you’ll need sufficient money to make a SMSF worthwhile.

Valuable tax savings

Like all superannuation funds, SMSFs benefit from generous tax concessions. Contributions to the fund plus the returns on the fund’s investments are all lightly taxed so more of your money goes to work for your retirement.

A flexible choice of investments

An SMSF can have some advantages in terms of the mix of investments - within legal guidelines, including direct property. You’ll need a written plan that shows how the fund is investing for the benefit of its members

A SMSF helps you save for retirement

One of the key rules of SMSFs is that the fund can only be used to invest for retirement – you can’t normally access the money before reaching retirement age.

Strict rules apply - so speak to our experts first

SMSFs must be run within strict guidelines. As each member of a SMSF is also a trustee, you are responsible for meeting those rules, and if you’re considering a SMSF it’s essential to be aware of what’s involved.

Buying property with Your SMSF



In order to buy property with your SMSF you must ensure you comply with the rules set out by the ATO.The general SMSF property rules include:

  • The property must meet the sole purpose test of solely providing retirement benefits to fund members. 
  • The property purchased must not be from a related party of a fund member. 
  • The property can not be lived in or rented by a fund member or any related parties of a fund member. 
  • If purchasing a commercial property, it can be leased to a fund member or related parties of a fund member for their business - as long as it is solely used for business purposes. However, it must be leased at the market rate and follow specific rules.


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