New to SMSFs, or weighing one up? Start here. Each answer links to the SMFP calculators and guides that let you run your own numbers.
What is a self-managed super fund (SMSF)?
An SMSF is a superannuation fund you run yourself, as trustee, for your own retirement. Unlike an industry or retail fund, you choose the investments, keep the records and are responsible for meeting the rules set by the ATO. An SMSF can have up to six members, and every member is normally a trustee (or a director of the fund's corporate trustee).
The appeal is control and flexibility; the trade-off is the time, cost and legal responsibility that come with being a trustee.
How much do I need to set up an SMSF?
There's no legal minimum balance to start an SMSF. In practice it's a cost-effectiveness question: an SMSF has fixed yearly costs — an independent audit, the ATO supervisory levy, accounting and administration — that are much the same whether your balance is large or small. So a very small fund can end up paying a high percentage in fees.
ASIC has previously flagged that balances under about $200,000 may struggle to be cost-competitive with a large APRA-regulated fund, though the right number depends on your costs and how actively you invest. Run the fee numbers before you decide.
How is an SMSF taxed?
In accumulation phase, an SMSF's income is taxed at 15%, and capital gains on assets held more than 12 months are effectively taxed at 10%. Once a member moves into retirement (pension) phase, income and capital gains on the assets supporting that pension are generally tax-free (0%), up to the transfer balance cap.
That low-tax environment is one of the main reasons people use super to hold income-producing and growth assets.
What is Division 296 tax, and does it affect me?
Division 296 is an extra tax on the earnings attributable to very large super balances. From 2026-27, members with a total super balance above $3 million face an additional 15% on the portion of realised earnings above that threshold (and 25% on the portion above $10 million).
It only applies to the balance above the threshold — not your whole balance — so most people aren't affected. If you're near $3 million, it's worth modelling.
Estimate your Division 296 tax →What can an SMSF invest in?
An SMSF can invest in a wide range of assets: Australian and international shares, ETFs and managed funds, residential and commercial property, cash and term deposits, fixed interest and bonds, and even cryptocurrency, precious metals and collectibles — provided each investment is allowed by the fund's trust deed and investment strategy, is held in the fund's name, and meets the sole purpose test.
Some assets carry extra rules (property borrowing, collectibles, related-party acquisitions), so the asset mix is where most of the SMSF rulebook lives.
See how each asset is taxed, in and out of super →Can my SMSF still borrow to buy property?
The rules changed in 2026. Following the Treasury Laws Amendment (Tax Reform No. 1) Act 2026, an SMSF can no longer use a limited recourse borrowing arrangement (LRBA) to buy residential property — established or new. Borrowing is now only permitted where the asset is business real property.
Existing residential LRBAs entered into before commencement are grandfathered and can be refinanced. An SMSF can still buy residential property outright (unleveraged) if it suits the fund's strategy.
Can my SMSF buy my business premises?
Yes. Business real property is treated differently from residential property. An SMSF can acquire business real property from a related party at market value, and can still use an LRBA to buy it.
This is why many small-business owners hold their business premises inside their SMSF and lease them back to the business at market rent — a legitimate strategy, provided the lease is on arm's-length commercial terms and properly documented.
What is the sole purpose test?
The sole purpose test requires that an SMSF is maintained for the sole purpose of providing retirement benefits to its members (or death benefits to their dependants). In practice it means the fund's assets can't give a present-day benefit to members or related parties — you can't live in the fund's residential property, use its holiday house, drive its classic car or hang its artwork in your home.
Breaching the sole purpose test is one of the most serious compliance failures an SMSF can make.
What is the in-house asset rule?
The in-house asset rule limits how much an SMSF can invest in, lend to, or lease to related parties to 5% of the fund's total assets. It's designed to stop SMSF money being used to prop up members' personal or business interests.
There are limited exceptions (such as business real property leased to a related party), but acquiring most assets from a related party is prohibited, with a narrow exception for listed securities at market value.
Can my SMSF hold cryptocurrency?
Yes, but under strict conditions. It must be allowed by the fund's trust deed and investment strategy, held in a wallet or exchange account in the fund's name (never mixed with a member's personal crypto), properly valued at year-end, and consistent with the sole purpose test.
Because crypto is highly volatile, a very large allocation can be hard to justify against an SMSF's diversification and liquidity obligations.
Can my SMSF invest in art or collectibles?
An SMSF can hold collectibles such as art, antiques, jewellery, wine, classic cars and coins — but under some of the tightest rules of any asset. The item can't be used by, or stored in the residence of, any member or related party; storage decisions must be documented and minuted; the item must be insured in the fund's name within seven days of purchase; and any sale or transfer to a related party must be at market value set by a qualified independent valuer.
Many trustees conclude the compliance burden outweighs the benefit.
Does my SMSF need an investment strategy?
Yes. Every SMSF is legally required to prepare and regularly review a written investment strategy. It must consider diversification, the risk and likely return of investments, the fund's liquidity and ability to pay benefits as they fall due, and whether the fund should hold insurance for its members.
A fund heavily concentrated in a single asset (such as one geared property) should document why that concentration is appropriate, rather than leaving it as an accident.
What are my responsibilities and costs as an SMSF trustee?
As trustee you're personally responsible for running the fund within the law: keeping it compliant with the sole purpose test and investment rules, maintaining records, preparing financial statements, arranging an annual independent audit, lodging the fund's tax return and paying the ATO supervisory levy. Ongoing costs typically include the audit, the levy, and accounting or administration fees.
The responsibility can't be delegated away — even if you hire an accountant or administrator, the trustees remain legally accountable.
Run your own SMSF numbers
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