Shares vs Property (In Super) Calculator

This calculator is designed to provide a like-for-like comparison between investing in shares within traditional superannuation and purchasing an investment property within a self managed super fund. To keep the comparison fair and practical, the following assumptions are used:

1. Like-for-like cash investment (super contributions)

A fair comparison is achieved by investing the same net cash amount into both assets within superannuation. Each year, the amount invested in shares matches the net cash loss (or surplus) from holding the investment property in super.

All cash flows are assumed to occur inside super and are subject to superannuation tax rules. Contributions are assumed to occur consistently (monthly or annually) and within applicable concessional contribution caps.

2. Lender’s Mortgage Insurance (LMI)

Where applicable, LMI is estimated based on publicly available online data. Actual premiums vary by lender, insurer, loan structure, and deposit size. LMI is assumed to be paid from the initial super balance allocated to the investment, reducing the amount available as a deposit.

LMI availability and terms within superannuation (including SMSFs) are lender-specific and may be more restrictive than personal lending.

3. Land tax thresholds and rules (SMSF-specific)

Land tax is calculated using SMSF-specific thresholds and rates based on current state rules. These thresholds are assumed to remain unchanged over time.

The model does not attempt to predict future changes to land tax thresholds, rates, assessment methods, or surcharges, all of which are determined by state governments.

4. Loan term and structure

A 30-year loan term is assumed, which is common for SMSF property loans. The model assumes a consistent loan structure over the term and does not include interest-only periods unless this option is selected.

The model does not account for future changes to lending terms that may be required due to superannuation law or lender policy.

5. Superannuation tax treatment

All investment income and expenses are taxed at a constant superannuation accumulation-phase tax rate throughout the modelling period.

The model does not account for a transition to retirement phase or pension phase, where tax outcomes may differ.

6. Superannuation fees (shares)

No explicit share brokerage is included. Instead, the model includes a superannuation fees section that applies to the shares investment.

Fees can be manually entered by the user or, by default, are automatically calculated in line with the Australian Retirement Trust – International Index Shares investment option. Fees are assumed to be deducted from super balances and remain consistent over time.

7. Share dividends and property rent

Share dividends are assumed to remain a consistent percentage of share value (e.g. 2.5%). All dividends are reinvested within superannuation.

Franking credits are applied at the superannuation tax rate and may reduce tax or generate tax refunds, increasing the amount available for reinvestment.

Property rent is assumed to grow independently of property value and is taxed within super at superannuation rates.

8. Property losses and no negative gearing

Unlike personal investing, negative gearing benefits are not available in superannuation.

If a property generates a net loss, the loss cannot be offset against other income outside the super fund. Instead, losses are carried forward within the super fund and can only be used to offset future taxable income or capital gains generated by the fund.

The model applies carried-forward losses against future rental income and/or capital gains where applicable.

9. Investment return consistency and sequence risk

The model assumes consistent annual growth and income rates for both shares and property. In reality, returns are volatile and the sequence of returns can materially affect outcomes.

This simplification also applies to interest rates, rental growth, expenses, vacancies, dividend income, and inflation, which are all modelled as stable annual values.

10. Holding period and liquidity

The model assumes the super fund is able to hold both investments for the full selected time period and does not require asset sales due to cash-flow stress, compliance issues, or adverse market conditions.

11. Transaction costs and capital gains tax

The main calculator compares outcomes on a pre-sale basis and does not include property selling costs or capital gains tax in the headline results.

A separate Selling Analyser illustrates the potential impact of selling costs and CGT under superannuation tax rules, including eligibility for CGT discounts and differences between accumulation and pension phase treatment.

Results from the Selling Analyser are illustrative only. Actual outcomes depend on the fund’s tax position, member status, and tax law at the time of sale.

12. Inflation treatment

All figures are presented in nominal terms unless otherwise stated. Returns are not adjusted for inflation unless explicitly selected.

13. Behavioural assumptions

The model assumes disciplined investing behaviour. Contributions and reinvestments continue during market downturns and are not altered in response to short-term market movements.

14. Contribution checker and concessional limits

The calculator includes a contribution checker that estimates:

• Super Guarantee concessional contributions, and

• The maximum concessional contribution available based on current rules.

The checker also incorporates the impact of Division 293 tax for individuals with an income over $250,000.

Its purpose is to help users assess whether the net cash loss from the property investment can be funded without exceeding concessional contribution limits, which may restrict the practical feasibility of the strategy.

15. Regulatory and policy stability

The model assumes no major changes to superannuation tax rules, contribution caps, lending rules, or housing policy that would materially alter outcomes. Future policy changes cannot be reliably predicted and are not modelled.

Disclaimer 

This calculator is provided for general information and educational purposes only. It does not constitute financial, investment, tax, or legal advice and does not take into account your objectives, financial situation, or needs. 

The results are based on user inputs and modelling assumptions and are illustrative only. Actual outcomes may differ materially due to changes in markets, interest rates, taxation, legislation, and individual circumstances. Past performance and modelled returns are not a reliable indicator of future performance. You should not rely on this calculator as the sole basis for making financial decisions. 

This calculator is intended to assist users in understanding potential investment outcomes and trade-offs. It does not recommend any specific investment strategy or asset class. 

The creator of this calculator is not a licensed financial adviser and does not provide personal financial advice. Before making any investment or financial decision, you should consider your personal circumstances and seek independent advice from a qualified and licensed professional where appropriate.