Your Super, Your Strategy, Your Choice of Investment

For many Australians, superannuation is one of their largest assets — yet the investment decisions behind that super can be very different depending on whether your money remains in an industry super fund or you take control through a Self-Managed Super Fund (SMSF).

Industry super funds provide professionally managed, diversified investment portfolios. An SMSF can provide something fundamentally different: control over the investment strategy and, where permitted, the ability to invest directly in property.

The question is not simply whether property will outperform shares, or whether an SMSF will outperform an industry fund. The more important question is:

Two Very Different Investment Approaches

An industry super fund generally invests your superannuation across a diversified portfolio of assets such as Australian and international shares, property securities, infrastructure, fixed interest and cash. You select an investment option, but you generally do not select the individual assets held within that portfolio.

An SMSF is different. The trustees are responsible for establishing and implementing the fund’s investment strategy, within the requirements of superannuation law. For an investor who wants direct exposure to property, this can provide substantially greater control over the type of asset held by the fund.

That does not automatically make an SMSF better. It means the investor has more responsibility — and potentially more strategic choices.

How Have Industry Super Funds Actually Performed?

Superannuation has delivered strong long-term returns, particularly from diversified investment options with substantial exposure to growth assets. According to SuperRatings, the median Balanced option (60–76% growth assets) has performed as follows:

Source: SuperRatings, FY26 Top Super Returns Revealed, 17 July 2026.

These figures matter because they show industry and other large super funds can deliver substantial long-term returns. But that return is generated by the underlying portfolio the fund selects — you don’t choose the individual property, development, commercial building, shares or infrastructure assets that make up the portfolio. Your role is primarily to choose the fund and investment option.

What Changes When You Establish an SMSF?

With an SMSF, the trustee has responsibility for the fund’s investment strategy. Subject to superannuation law and the fund’s investment strategy, an SMSF can potentially invest in property. This can include:

The 13.22C Unit Trust Strategy

A different way to structure residential property ownership

One of the most significant changes to SMSF property investment in 2026 is the restriction on new residential property LRBAs. But the change did not prohibit an SMSF from owning residential property — it changed the way investors need to think about the structure.

Under the right circumstances, a 13.22C unit trust can allow an SMSF to acquire units in a related unit trust that owns the property, provided the trust satisfies the strict requirements of Regulation 13.22C of the Superannuation Industry (Supervision) Regulations 1994.

The significance of Regulation 13.22C is that, when the requirements are satisfied, the SMSF’s investment in the related unit trust can be excluded from the fund’s in-house asset rules. The ATO confirms the relevant unit trust must satisfy specific requirements, including that it must not have borrowings — and those conditions need to keep being satisfied while the SMSF holds the investment.

How can a 13.22C structure work?

Instead of the SMSF having to own 100% of the property directly, the property is owned by a unit trust, and different investors can hold different numbers of units in that trust. For example:

The percentages are not fixed. An arrangement could potentially involve the SMSF initially holding a smaller interest and acquiring additional units over time, subject to the structure remaining compliant and each transaction being properly valued and documented. For example, an illustrative structure could start with 99% outside super / 1% SMSF, move to 95% outside super / 5% SMSF, and later to 80% outside super / 20% SMSF.

These are illustrations only. There is no universal or recommended percentage split — the appropriate structure depends on the investor’s circumstances, SMSF balance, available capital, cash flow, valuations, investment strategy and professional advice.

Where Does the Leverage Come From?

This is one of the most important distinctions to understand. The 13.22C unit trust does not borrow. A 13.22C structure is not an alternative SMSF LRBA — the unit trust itself must remain ungeared if it is to satisfy the relevant requirements.

Instead, an investor may potentially use capital or borrowing capacity outside super as part of the overall investment structure — for example, equity in their family home, an existing investment property, other assets, or cash and investments outside super. Subject to borrowing capacity, serviceability and appropriate financial, tax and legal advice, some of that capital may potentially be used outside super to participate in the property-owning structure.

The SMSF then acquires units in the trust rather than borrowing to acquire the residential property itself — fundamentally different from the former residential LRBA strategy. Commercial property remains different again: see our SMSF Loans page for how LRBA borrowing still works for eligible business real property.

Residential Property vs Commercial Property

The 2026 changes make it particularly important to distinguish these two strategies.

See our Residential and Commercial Property pages for the full detail on each path.

Why Property Can Be Different From a Traditional Super Investment

The attraction of property is not simply that it is a tangible asset. For the right investor, property can provide several characteristics within a retirement strategy:

• Tangible asset — you can identify the underlying asset rather than simply owning units in a diversified investment option.
• Rental income — an investment property can generate ongoing rental income.
• Potential capital growth — an investment-grade property may potentially appreciate over the long term, driven by factors including land value, population growth, employment, infrastructure, and supply and demand.
• Greater investment control — an SMSF trustee can make decisions about the asset within the requirements of the fund’s investment strategy and superannuation law.
• Potential gearing — where the law and structure permit borrowing, gearing can increase the value of the asset exposure relative to the investor’s initial capital. But gearing also increases risk, and a higher level of exposure to property does not guarantee higher returns.

The Real Comparison Isn’t “Shares vs Property”

It’s tempting to compare an industry super fund with an SMSF property strategy by looking only at the headline investment return. That can be misleading.

The appropriate choice depends on the investor. There is no single strategy that is right for everyone.

What About Fees?

Fees matter over a long investment period. An industry super fund’s published investment return already reflects investment costs in the reported performance figures, but members can also have other costs such as administration and insurance costs depending on the fund and their circumstances.

With an SMSF, the investor becomes responsible for the costs of running the fund. These may include:

• SMSF establishment
• Accounting, tax returns and audit
• Administration, legal and financial advice
• Valuations and property management
• Property acquisition costs and lending costs where applicable
• Ongoing compliance

The right comparison is therefore not simply “which has the lowest fee?” It is:

The Power of Combining Super and Outside-Super Assets

This is where sophisticated SMSF property planning becomes particularly interesting. Many investors think of their SMSF and their personal investments as two completely separate worlds — but retirement planning can require looking at the broader financial picture: superannuation, home equity, existing investment property equity, cash, borrowing capacity and future contributions.

The question becomes:

A 13.22C structure is one example of how ownership inside and outside super can potentially be coordinated around the same underlying residential property. Commercial property using an eligible LRBA is another. Neither strategy is appropriate for every investor.

A Critical Point: The Property Still Matters

A sophisticated structure cannot turn a poor property into a good investment. This is why strategy should come before property. Before considering a particular SMSF property structure, the underlying investment should be assessed for factors such as location, population and employment growth, infrastructure, supply and demand, rental yield, land value, long-term capital growth potential, liquidity, diversification, and total acquisition and holding costs.

Our Comparing Properties in SMSF guide walks through how to weigh these factors against each other. The structure should be designed around the investment strategy — not the other way around.

What Are the Risks?

Property investment through an SMSF is not risk-free. Investors need to consider:

The establishment and ongoing costs of an SMSF and property structure need to be justified by the size and suitability of the strategy.

Who Might Consider an SMSF Property Strategy?

An SMSF property strategy may be worth investigating for an investor who:

• Has meaningful superannuation assets and a long investment horizon
• Wants greater control over their retirement investments
• Has sufficient capital or equity outside super, and appropriate borrowing capacity where borrowing forms part of the strategy
• Understands the responsibilities of being an SMSF trustee
• Is comfortable with the additional costs and administration
• Is prepared to obtain appropriate professional advice before implementing a structure

It may not be appropriate for someone who:

• Has insufficient superannuation or capital, or is already highly leveraged
• Needs high liquidity, or cannot justify the costs of running an SMSF
• Has insufficient cash flow to withstand changes in interest rates or rental income
• Wants to establish an SMSF purely to buy a particular property
• Is primarily attracted by a perceived tax advantage

ASIC’s MoneySmart guidance also emphasises that an SMSF needs to be considered in the context of the investor’s circumstances, objectives, diversification, liquidity, risk and likely returns.

So, Which Is Better?

There is no universal answer. An industry super fund can provide diversification, professional management and liquidity. An SMSF can provide control, flexibility and direct property exposure. And within an SMSF, the appropriate property strategy may be very different again — residential property outright, a properly structured 13.22C unit trust, commercial property using an eligible LRBA, or remaining in a diversified industry or retail fund.

The important thing is not to start with the property. Start with the investor’s objectives, resources and overall retirement strategy — our SMSF and Investment Property overview and SMSF Portfolio Review are good places to start that conversation.

Strategy Before Property

At properT network, our philosophy is simple:

We don’t believe the first question should be “What property can I buy through my SMSF?” The better question is “What am I trying to achieve with my retirement assets, and what investment strategy gives me the best opportunity to achieve it?” From there, we can investigate whether residential property, commercial property, a 13.22C unit trust, another investment strategy — or an SMSF at all — is appropriate. Read more on our Strategy Before Property page.

What Should You Do Next?

1. Review your SMSF

   Current balance, existing investments, contributions, investment strategy, liquidity, retirement timeframe and expected income requirements.

2. Review your assets outside super

   Home equity, investment property equity, existing debt, cash, borrowing capacity and other investments.

3. Determine whether property actually makes sense

   Don’t start by choosing a property — start by determining whether property fits your objectives and risk profile.

4. Investigate the available structures

   Residential property purchased outright, a 13.22C unit trust, commercial property using an eligible LRBA, diversified investments, or another strategy altogether.

5. Obtain specialist advice

   SMSF, tax, trust, lending and legal structures can be complex — get advice from qualified, appropriately licensed financial, tax and legal professionals before implementing a strategy.

6. Then select the property

   Once the strategy and structure have been established, the property should be selected to fit the strategy — not the other way around.

The Bottom Line

The 2026 changes have fundamentally changed how investors need to think about residential property and SMSFs. New residential property LRBAs are no longer generally available from 10 August 2026, but an SMSF can still potentially own residential property without borrowing. For some investors, a 13.22C unit trust may provide another way to coordinate ownership between the SMSF and assets outside super, provided the strict regulatory requirements are satisfied. For eligible commercial property, an SMSF can still potentially use an LRBA.

These are different structures for different circumstances. The objective should never be simply to find a way to put property into super. The objective is to determine:

That’s where professional strategy matters.

Explore the properT network Family of Sites

SMSF property is one part of a much bigger picture. Our other sites cover investment property more broadly, by location and by strategy:

• properT network — our main site, covering property investment strategy across personal name, trust and SMSF ownership structures.
• Investment Property Queensland — investment property opportunities across Brisbane, South East Queensland and regional QLD.
• Investment Property Melbourne — investment property opportunities across Melbourne and Victoria.
• Downsizing for Retirement — downsizing and super contribution strategies for retirees.

This page provides general information only and does not constitute personal financial, investment, tax, legal or SMSF advice. SMSF, superannuation, trust and taxation legislation is complex and can change. A 13.22C unit trust must satisfy specific legislative requirements, including ongoing requirements while the SMSF holds the investment. The structure of any investment should be assessed against the investor’s individual circumstances, objectives, financial position, investment strategy and risk tolerance. Borrowing outside super remains the responsibility of the borrower and carries its own risks, including changes in interest rates, property values, rental income and cash flow. Past performance (including the SuperRatings figures above) is not a reliable indicator of future performance. Any property investment should be independently assessed on its own investment merits. Before establishing or entering into an SMSF, unit trust, property investment or borrowing arrangement, obtain appropriate advice from qualified and appropriately licensed financial, tax and legal professionals. For further information about SMSF investment restrictions and Regulation 13.22C, refer to the Australian Taxation Office’s published guidance.