What is an SMSF?

A Self-Managed Super Fund (SMSF) is a private superannuation fund which members manage on their own. This is unlike regulated super funds or industry super funds, which are managed for you by the fund itself.

Regulated super funds place your retirement funds into investments and insurance which they choose. Having the control to do this on your own is what brings many retirement-focused individuals to SMSFs.

But an SMSF can carry risk for those who don’t read the fine print or have the know-how to manage themselves. As always, consult your financial adviser or accountant before setting one up and before using an SMSF to invest.

What are the SMSF benefits?


You have the autonomy to manage where your retirement funds are invested. You can diversify your investments as you (or your financial advisor) see fit. For example, by investing in shares, residential property, and commercial property investment.

Use super to buy property

Some SMSF members also use their super fund to buy property.

Property investment can provide stable income return if the property is strategically purchased and the risks of investing understood. Find out if SMSF property investment is right for you by consulting your accountant or financial planner.

Tax savings

Capital Gains Tax (CGT) is typically capped at 10% if the investment is made under the SMSF.

And for those borrowing under the self-managed super fund, interest accrued on the loan can be tax deductible.

We are not tax experts so consult your accountant or financial planner before making any decisions on investing or starting your own self-managed super fund.

Borrow under a Limited Recourse Borrowing Arrangement (LRBA)

With an SMSF, you might be able to apply to borrow from the bank under a Limited Recourse Borrowing Arrangement (LRBA) or non-recourse loan. This means the bank typically has limited recourse if your loan cannot be repaid.

How much does an SMSF cost?

There is no specific cost for setting up an SMSF. In 2020, it was stated by CANSTAR that the average cost to just set up an SMSF is approximately $2,500 with an additional $2,700 in ongoing fees. Financial planners may charge $5,000 per year to manage the SMSF. And compliance costs can push the bill up even further.

Sure, SMSFs aren’t cheap. Which means if you’re considering using one, also consider how you’re going to recoup the costs. Consult your financial planner before making any investment decisions using your SMSF.

Ensure you invest correctly

We wrote an article in The West Australian which labelled commercial property an SMSF winner. This is because of the costs involved in setting up an SMSF and the returns commercial real estate investment can sometimes offer. There’s no point paying the lengthy list of costs if you’re not leveraging from a high-yielding investment.

Commercial real estate has the potential to provide investors with yields of between 5% and 7% (and sometimes even higher).

To find out how you can set up an SMSF and invest in commercial real estate, get in touch with us today.

Any information provided on this website has not considered the objectives, financial situation or needs of any investor; investors should consider whether it is appropriate to them to partake in a commercial property investment prior to investing, in light of their objectives, financial situation or needs. Consult your financial advisor or accountant before setting up an SMSF or making any investment decisions.