The maximum rate of tax your SMSF will pay on rental income is 15%. And if your SMSF is in the pension phase, this rate drops to 0%. This compares favourably with personally held property where rental income is taxed at your marginal tax rate, which in some cases can be as high as 46.5% (including Medicare levy).

Another advantage is that if your SMSF holds the property for more than 12 months, any capital gain made on the sale of the investment property will be taxed at a maximum rate of 10%, or again, 0% if the SMSF is in pension phase.