Self-managed super fund
A private super fund with up to six members who act as trustees and control the investments themselves.
An SMSF is a superannuation fund you run yourself. Members are also trustees, responsible for the investment strategy, compliance, record keeping, annual audit, and lodgment.
The attraction is control and flexibility — the ability to hold direct property, specific shares, or business real property that retail and industry funds do not offer.
The cost is real. Annual accounting, audit and compliance fees mean an SMSF is generally uneconomic below a substantial balance, and trustees carry legal responsibility even when they delegate the work to advisers.
Where the fixed costs bite
Roughly $3,000 a year of accounting and audit costs is about 0.6% on a $500,000 balance but 3% on a $100,000 one — enough to consume most of the expected return.
The bit people get wrong
Trustees are personally liable for compliance breaches even if an adviser caused them. Penalties apply to each trustee individually, so a two-member fund can face the penalty twice for the same error.
Common questions
How much do I need to start an SMSF?
There is no legal minimum, but regulators have suggested balances below around $200,000 are unlikely to be cost-competitive with a large fund.
Can my SMSF buy property?
Yes, including with borrowing under a limited recourse arrangement. The rules are strict, particularly around related parties and the sole purpose test.
Can I live in a property my SMSF owns?
No. Residential property owned by your SMSF cannot be used by members or their relatives, and breaching this can make the entire fund non-complying.