Understanding Self-Managed Super Funds for Medical Professionals

I’m often asked by doctors and dentists whether an SMSF is the right move especially when they’re looking to buy their own practice rooms. The short answer: an SMSF can be a powerful tool for the right purpose, but it’s not a one-size-fits-all solution.

What is an SMSF?

• It’s your own super fund where you’re the trustee and decision-maker.

• With control comes responsibility: compliance, record-keeping and ongoing administration.

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Understanding Self-Managed Super Funds for Medical Professionals

When an SMSF can make sense

Buying your own practice rooms (business real property) is the most compelling use case I see for medical professionals:

• You pay rent to “your future self” at market rates.

• Potentially tax-effective structure for long-term wealth building.

• Greater control over the property, fit-out and lease terms.

• Ability to co-own with your spouse or through a unit trust (specialist advice essential).

• Option to use limited-recourse borrowing (LRBA) where appropriate.

When an SMSF may not be ideal

If the goal is simply to invest in shares, there are usually simpler, lower-effort options:

• Time and complexity: trustee duties, annual returns and audits.

• Fixed costs: admin, accounting, audit and advice more palatable with higher balances.

• Investment risk and diversification: smaller balances can end up too concentrated.

• Liquidity constraints: funding pensions, tax and expenses can be tricky.

• Borrowing adds risk and reduces flexibility.

• Insurance: you may lose default cover when moving from an APRA fund—this needs careful planning.

• Rule traps: sole purpose test, arm’s-length transactions, related-party restrictions.

• Policy changes: be mindful of proposed rules for high super balances.

Simple alternatives to consider

• Stay with a quality super fund and use low-cost diversified options.

• Use professionally managed or index strategies within your existing super platform.

• Buy rooms outside super via the right structure (e.g., trust/company) and lease to your practice.

• Co-invest via a compliant unit trust structure if partnering with others.

• Consider commercial property funds if direct ownership isn’t right for you.

Key questions before you set up an SMSF

• What’s the primary purpose property, control, or something else?

• Is your super balance high enough to justify the fixed costs?

• Do you have the time and interest to act as trustee?

• Will you need to borrow, and does the cash flow comfortably stack up?

• How will you handle insurance, estate planning and incapacity?

• What’s your exit plan if your circumstances change?

If you’re considering buying your practice rooms

• Speak to your accountant and financial adviser early.

• Model the cash flow (rent, contributions, loan repayments, expenses).

• Get structuring advice (SMSF, unit trust, or outside super).

• Seek finance pre-approval for any LRBA.

• Arrange an independent valuation and a properly documented market-rate lease.

• Plan contributions within caps and ensure adequate liquidity.

• Review insurance before moving any existing cover.

  
  

Bottom line

An SMSF can be highly effective for owning your practice rooms, but it’s rarely the best path for share investing alone. Be clear on your goals, weigh the trade-offs and explore simpler options first.

If you’re exploring practice property or weighing up an SMSF, I’m happy to talk it through and coordinate with your accountant. Reach out with any questions about super or SMSFs.

This is general information only get personal advice before acting.