End of Financial Year Wrap-Up: Why Self-Managed Super Funds Are Back in the Spotlight

As another financial year draws to a close, property investors have more than the usual EOFY checklist to work through. Recent federal budget changes the result of a deal between the government and the Greens have reshaped the rules around superannuation and property, and the window to act is narrower than many investors realise.

In a recent Property Investors webinar, host Jason Foote walked through what’s changed, why self-managed super funds (SMSFs) have suddenly jumped to the top of so many investors’ priority lists, and what needs to happen before the clock runs out.

First, the easy win: prepaying expenses

Before diving into super, Foote flagged a simple, timely reminder for anyone holding an investment property in their own name and claiming negative gearing or depreciation. Investors in this position may be able to prepay expenses such as interest or property management fees which is up to two years in advance.

This can be particularly useful for anyone who has had a strong income year, whether through self-employment or a promotion, and wants to shift some tax liability into future years. It may also open the door to negotiating better rates with service providers. As with anything tax-related, this is a conversation to have directly with an accountant and given the EOFY deadline, sooner rather than later.

The real headline: changes to super fund borrowing

The bigger story is a change to the rules around borrowing inside a self-managed super fund. Until now, many investors have used SMSFs to borrow money and buy property within the fund — a strategy that suddenly faces a hard deadline.

According to Foote, this shift changes the calculus for the vast majority of his clients, because the appeal of an SMSF property largely comes down to leverage: the ability to borrow within the fund to acquire a larger asset than the fund’s cash balance alone would allow.

He also noted that recent changes to capital gains tax haven’t hurt clients holding property inside an SMSF in the same way they’ve affected other investors because a property sold from within a compliant super fund structure can still avoid capital gains tax altogether, and the proceeds can be used to pay down debt on other properties. What has changed, and what stings more, is the loss of the 50% capital gains tax discount that previously applied.

Why investors consider a property inside their super fund

Foote outlined several reasons SMSF property has become an attractive strategy for long-term investors — without, he was careful to note, offering personal financial advice.

1. Leverage. Using a portion of an existing super balance as a deposit allows a fund to borrow the rest, effectively turning a smaller balance into a much larger asset. In Foote’s example, $200,000 from a $300,000 super balance could help secure a $600,000 property, with the remaining $100,000 still invested turning $300,000 into $700,000 of assets working inside the fund.

2. Capital gains tax relief in retirement. For investors aged 60 and over in a transition-to-retirement phase, selling a property held inside the fund can potentially be done free of capital gains tax. Because the tax benefit is limited, a principal-and-interest loan tends to make more sense than an interest-only loan in this context — the goal being to enter retirement with a property that’s paid off, or close to it.

3. Ongoing tax benefits. Running an SMSF isn’t free. Audits, tax returns, and advice typically cost a few thousand dollars a year but this is often roughly offset by tax credits generated by the property itself, particularly compared with the fee structures of pooled (retail or industry) super funds.

4. Diversification away from stock market volatility. Foote pointed to the aftermath of the global financial crisis, when clients nearing retirement saw pooled super balances — heavily weighted to shares — fall sharply, delaying retirement plans for some. Property, he argued, tends to be less volatile than equities, particularly in the case of median-priced housing, which people continue to need regardless of economic conditions. He was careful to distinguish this from “lifestyle” or luxury property, which behaves more like a discretionary asset and can fall harder during downturns.

5. A broader shift away from pooled super funds. Foote also pointed to what he sees as a longer-running trend of investors moving money out of pooled super funds and into self-managed structures — and suggested the current environment presents a timely opportunity for investors considering that move.

The clock is ticking

The practical sting in all of this is timing. The government’s deadline applies to the contract of sale for a property purchased inside a super fund meaning the fund needs to be established, the relevant trust structures in place, and a property identified before a contract can even be signed. A 45-day grace period gives investors roughly six weeks from the deadline to get a signed contract in place.

That’s a tight timeline for a process that typically involves multiple meetings with a financial adviser, a full compliance and structuring process, and matching a suitable “superannuation style” property to an investor’s numbers.

Foote noted his team has been working at pace to help clients who’d previously had preliminary conversations move through that process before time runs out.

A note on pricing

One further point for investors currently browsing the market: prices on new land, townhouses, apartments and house-and-land packages have generally risen since the federal budget was announced, reflecting strong demand across those segments.

However, properties already negotiated and placed on Property Investors’ list prior to the budget have had their pricing frozen , a detail worth discussing with a consultant for anyone weighing up options in the current market.

The bottom line

None of the above constitutes personal financial advice, and Foote was explicit that decisions around SMSF structuring need to go through a qualified adviser who understands both superannuation compliance and property. But for investors who’ve been putting off the conversation, the combination of a firm government deadline and a 45-day grace period means EOFY 2026 is a genuine inflection point — not just another webinar talking point.

If any of this applies to your situation, the advice is simple: talk to your accountant about prepaying expenses today, and get in touch with your property investment consultant as soon as possible to see whether there’s still time to act before the window closes.

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