Saving money is essential. Smart people save money by investing it in the market or through a savings account in the bank. Investing is an efficient way to make money work and build wealth. It makes the value of money grow and compound over the long term. People of all ages are interested in investing because they want a financially secure future. And there is always time to start investing. A self-managed super fund (SMSF) is a fund that allows people to manage their investments for their retirement. People can use SMSF investment property purchases. However, they must use the fund to pay a 15% tax on the rental income obtained from the property.

SMSF property investment offers several benefits to those looking for ways to invest and reap the benefits during their retired life. The fund can have a maximum of four members, and each member is a trustee. All of them have equal responsibilities. 

What properties are bought with SMSF?

  • Residential and commercial property
  • Shares
  • Fixed income products
  • Cash and term deposits
  • Physical commodities 

A minimum balance is not required to purchase a property using SMSF but having some money in the fund helps cover operating costs and run the property. Members of the fund and their relatives cannot live on the property. However, they can rent it out to anyone who is not a member of the fund or related to any other members. The most significant advantage of the SMSF is that the members take control of the assets invested.

Responsibilities of SMSF members

Members are personally responsible for all decisions made, even when they have taken help from other professionals. Sometimes the fund investments need to give the expected returns.

Fund members are responsible for managing the fund in all situations, even when they lose their job and become jobless.

Relationship breakdown can happen between members, and it makes a negative impact on the self-managed super fund. 

There will be no compensation if money is lost due to theft or fraud.

Managing an SMSF is not easy and requires a lot of work.

Steps to set up a self-managed super fund

Before setting up this fund, people must understand its responsibility and obligations. It helps to run the fund smoothly in the future.

People have the freedom to choose other members for the fund. Generally, it will be another family member, but people can choose anyone.

All the documents need to be maintained in order. It is essential for legal and regulatory terms.

Members must design an investment strategy and start implementing it soon.

Benefits of self-managed super fund

Investment choice

Members of SMSF have wider investment control and investment choices. Like residential or commercial property. It helps small business owners to own a property and lease it to the business after a few years.

Tax minimisation

SMSF enables people to enjoy a tax-free pension after their retirement. Even strategies that help to make a 5 – 10% tax reduction create a significant impact. There is no tax on the earnings received through the pension amount. The fund allocates earnings to each member at the right time. 


SMSF is cost-effective, and as it grows, the operating costs reduce and become even more cost-effective. The operating costs for this fund are considerably low because of the advancements in technology which allow people to manage everything by themselves.


Using SMSF investment property purchases helps small business owners buy properties with good value. But property is purchased after the documents are in place. If appropriately utilised, it greatly benefits the members of the fund.