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Purchase Property Tax-Effectively

With self managed super funds (SMSFs) you can invest your super directly in property and benefit from some powerful tax concessions.

A great benefit of SMSFs is you can invest your super directly in residential or business property. This option is usually not available with other super arrangements.

It can also be more tax-effective to purchase a property through a SMSF than buy it outside super.

This is because rental income is taxed in super at a maximum rate of 15% and is potentially tax-free if your fund is paying you a pension.

Also, when the property is sold, capital gains are taxed at 10%, if the investment has been owned for 12 months or more, and are potentially tax-free if a pension has started.

The table below compares the tax treatment of income and capital gains with other commonly used property ownership options.


Tax payable on:

Property owned by:
Individual Company Super Fund Super Pension
Rental Income Up to 45% 30% Up to 15% Nil
Capital Gains Up to 22.5% 30% Up to 10% Nil


MLC, 2011. Smart strategies for running your own super fund.


Published: September 19th, 2011  |  Investments, Strategies, Superannuation, Tax

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