SMSFs: What asset classes can you invest in?
Dominic Beattie
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Changes to SMSF borrowing rules
On 23 June 2026, the federal government announced it would no longer allow self-managed superannuation funds (SMSFs) to borrow money to fund investments in residential property.
From the date the legislation became official, SMSFs were given 45 days to finalise contracts already underway. (Sale contracts and limited recourse borrowing arrangements finalised during this period are not affected by the new rules.)
SMSFs can no longer purchase residential property via a loan, but will still be permitted to buy a residential property outright, without finance.
SMSFs with existing limited recourse borrowing arrangements in place will be permitted to refinance loans under existing refinancing rules.
The new SMSF rules apply to residential property purchases only and will not affect SMSFs buying commercial or industrial properties.
From property, shares, gold, and even vintage antiques, self-managed super funds (SMSFs) can give you direct control over investment choices for your retirement.
What can an SMSF invest in?
SMSFs can invest in a wise range of assets classes, including:
- property (residential and commercial)
- shares (Australian and international)
- managed funds
- cash (see also
- bonds
- term deposits
- physical commodities
- collectibles and personal use assets (but you or SMSF members can't use them)
- businesses (must be non-related to you or SMSF members
- cryptocurrency assets
See also: Savings accounts for SMSFs and how they work
Savings.com.au's two cents
Before we kick off, be aware there are considerable restrictions and regulations surrounding SMSF investments so before making any investment decisions, you must make sure you are clear on what's permitted.
You will also need to ensure any investments comply with your fund's stated investment strategy.
The Australian Taxation Office provides online advice but it's recommended you seek professional guidance from SMSF specialist advisors, accountants, or consultants to ensure your investments comply.
Can SMSFs invest in property?
Yes, many Australians use their SMSFs to invest in property. According to the latest data, property made up around 16% of all SMSF assets in Australia, with commercial property accounting for around two-thirds of the total.
See also: How to buy property through an SMSF in Australia
The basic rules surrounding SMSF property investment are:
- It must the 'sole purpose test' of solely providing retirement benefits to fund members
- It must not be acquired from a related party of a member
- It must not be lived in by a fund member or any fund members' related parties
- It must not be rented by a fund member or any fund members' related parties
Tax implications of buying a property through an SMSF
There can be some tax advantages to buying a property through an SMSF.
Firstly, rental income earned through the property will generally be taxed at 15% in the pre-retirement phase (accumulation phase), not at your marginal tax rate like other income is. In the retirement phase, this income generally won't be taxed at all.
See also: SMSF pension phase: What to know?
Secondly, any capital gains for properties held for longer than 12 months will receive a one-third discount, so the capital gains tax (CGT) rate for SMSFs in the accumulation phase is effectively reduced from 15% to 10%.
Other tax benefits to buying property through an SMSF:
- Tax-deductible interest repayments if the property is purchased via a loan
- You can carry forward your losses each year if expenses on the property exceed rental income (negative gearing)
- Rental income and capital gains are generally tax-free once the SMSF is in the pension phase
SMSF loans
Not all lenders deal in SMSF loans so if you're thinking of property investment for your SMSF, the table below features some of the most competitive SMSF loans.
Lender Home Loan Interest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees Max LVR Lump Sum Repayment Extra Repayments Split Loan Option Tags Features Link Compare Promoted Product Disclosure
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Can you invest in commercial property with an SMSF?
Yes, you can also invest in commercial property (such as an office building) through an SMSF. These come with their own rules.
If your SMSF buys commercial premises, they can be leased back to a fund member for their own businesses, but it must be leased back at the market rate.
But it must still meet the 'sole purpose test', that is to provide a retirement benefit to SMSF members. The ATO monitors and audits all SMSFs regularly to ensure they're compliant.
Can SMSFs invest in shares?
Yes, you can invest in shares through an SMSF, both domestic and international. Shares remain the most popular asset class of Australia's SMSFs, accounting for around 27% of total assets according to the latest data.
Shares are a popular investment choice among SMSF investors because:
they're relatively inexpensive depending on brokerage
they're easily transferable, and can be bought and sold quickly as needed with little admin
they're an easy to understand product, particularly if you're buying an exchange-traded fund (ETF)
they can come with several tax benefits, such as franking credits and capital gains tax discounts
See also: Investing on the stock market: an investor's cheat sheet
Like many investments, share values can fluctuate according to many factors but if you have a buy and hold mindset, shares generally tend to build value over time.
See also: Property vs shares - which is the better investment?
Can SMSFs invest in cash and term deposits?
You can invest in cash and term deposits with an SMSF. In fact, cash and term deposits account for around 16% of total SMSF investments, according to the latest data - around the same proportion of investments in property.
Cash can be suitable option for conservative investors, as it is generally regarded as the lowest-risk investment class. Cash returns depend on market interest rates but may be lower than asset classes that come with greater risk.
But cash is also a low maintenance investment class, meaning you can lock your money away in a 'set and forget' manner. While there may be less need to constantly monitor the market, you do need to keep a check on interest rates and automatic rollover features of term deposit products to ensure you're getting the best deal.
See also: Savings accounts for SMSFs and how they work
Can SMSFs invest in bonds?
Fixed-income assets, such as corporate or government bonds, are another other relatively low-risk option for SMSF investors.
Fixed-income assets tend to provide a higher yield than cash and term deposits and are generally considered less volatile than shares.
Bonds provide way to be paid regular interest in the form of coupons by the bond issuer. These can also be regarded as a 'defensive' asset to help weather volatile market conditions
See also: A brief guide to buying government bonds
Can SMSFs invest in gold and silver?
Yes, SMSFs can invest in commodities including gold, silver, bullion, platinum, and other precious metals.
For some investors, such commodities can be seen as a safer investments than shares as they tend to hold their value over time and are generally protected from economic factors such as inflation or stock market crashes. Although they are not risk-free, they are tangible assets, allowing you to hold some assets outside banking or digital systems.
There are several main ways to invest in precious metals including:
through an ETF where the fund has significant exposure to the metal
buying shares in miners of the metal
buying the metal outright in the form of bars or bullion, usually held in a storage facility in the investor's name
buying coins of the metal
But, be aware, if you hold physical coins, they are considered under SMSF rules to be a 'collectable' and come with specific storage and insurance requirements. (See below.)
Can SMSFs invest in collectables?
Yes, an SMSF can invest in collectables and other personal use assets, but they must be for genuine retirement investment purposes and not provide any present-day benefit.
Collectables make up a very small proportion of total SMSF investments in Australia, only around 0.1% of total assets. Collectables can include:
- fine art such as paintings, sculptures etc.
- jewellery
- wine and spirits
- classic cars & boats
- antiques and artefacts
- special coins and medallions
Diamonds, held in loose form, aren't considered collectables and don't attract specific requirements.
It's also worth noting collectables such as artworks can't be hung on the walls of SMSF trustees or members, but can be rented out to a party unrelated to the SMSF. Similarly, collectables can't be stored or displayed in the homes of related parties.
However, they can be sold to related parties provided the sale is at market value, as determined by a qualified, independent valuer.
Can SMSFs invest in cryptocurrency?
Yes, SMSFs are permitted to invest in cryptocurrency and it seems a growing number are choosing to include crypto assets in their investment portfolios, according to the ATO.
But the ATO warns it's also seen instances of SMSF trustees losing their crypto investments due to theft, lost passwords, and impersonation schemes.
First up, the investment must comply with SMSF investing rules. SMSFs must ask themselves:
is it allowed under the fund's trust deed?
is it in accordance with the fund's investment strategy?
will it be held in a separate wallet and trading account in the SMSF's name?
Essential tips for navigating SMF assets
The ATO offers the following advice to SMSF crypto investors:
- Name your wallet correctly in the name of your SMSF (not your own name)
- Separate investments: Personal and SMSF crypto assets must be kept separate at all times
- Use legitimate platforms: Always purchase and trade on reputable well-established platforms. Check they are a registered business or licensed, look for reviews and user feedback, ensure the site is secure, understand their policies
- Maintain good records: Record all transactions. Sales and transfers are classified as 'disposals' and may attract capital gains tax (CGT).
- Protect your wallet password: Keep your password secure and never share it
- Avoid related party transactions: The arms-length rule apply to crypto transactions also. Don't transact with related parties
- Valuation records: You'll require proper market valuation records for your auditor
The ATO also urges caution on impersonators posing as ATO staffers asking for wallet details. Here is some ATO advice on SMSF 'schemes' while moneysmart.gov.au also has advice on Crypto scams.
It's recommended SMSF trustees seek independent financial advice before investing in cryptocurrency. Crypto is an extremely volatile asset class that could result in either high losses or high returns. As such, it may not be suitable for SMSF investors with members close to retirement.
Can SMSFs invest in infrastructure?
Yes, an SMSF can invest in infrastructure which has traditionally been the domain of major institutional investors only.
This was because infrastructure projects, such as toll roads, airports, and other public-use assets, typically required large initial investments which were generally out of the reach of SMSF investors. However, with the emergence of new investment products, more SMSFs are choosing to add the asset class to their portfolios.
SMSF infrastructure investments are generally done through the purchase of:
- listed shares and ETFs (easier to trade but may be more volatile)
- unlisted infrastructure funds
Investments in infrastructure can offer protection from inflation as well as share market fluctuations. They can also provide regular income as projects are often backed by long-term contracts making for more predictable returns.
Diversification is key
The ATO warns that having your SMSF investments in one asset or asset class can lead to 'concentration risk'.
Before the pandemic in 2019, the ATO took the step of cautioning almost 18,000 SMSF trustees (at that time, around 3% of all SMSFs) about poor investment diversification.
These were largely funds that had more than 90% of their assets in one class using special 'limited recourse borrowing arrangement' loans.
See also: Can your SMSF borrow to invest? A simple guide for trustees
At the time, the warning sparked debate about the balance between a trustee's right to choose their own investment strategy and regulatory oversight.
Today, the ATO advises the following:
"Asset concentration risk is higher for leveraged SMSFs, such as where the trustee has used a limited recourse borrowing arrangement to acquire the asset. This can expose you to a loss in your retirement savings if the asset declines in value. It could also trigger a forced asset sale if loan rules are breached.
"You and the other trustees need to be aware of any legal risks that may result from investing in one asset class. Super laws require you to invest in accordance with the best financial interest of all members."
It's fair to say diversification is a widely advised investment strategy, designed to lower risk across the portfolio should one asset class lose value. Always seek expert advice if in doubt.
