SMSF (Self Managed Super Fund)

A Self Managed Super Fund is a private superannuation fund you run yourself (with up to six members), regulated by the ATO. SMSFs can hold residential or commercial investment property, and they can borrow to do so via a Limited Recourse Borrowing Arrangement (LRBA). The tax appeal is huge: rental income inside super is taxed at 15% during the accumulation phase and 0% in pension phase, and the CGT discount is one-third (so 10% effective tax on long-held gains in accumulation). The downside is complexity: trustees can't live in the property, can't rent it to family at non-arm's-length rates, can't use SMSF funds to renovate beyond limited repairs, and audit + admin fees run several thousand a year.