'Smart property' isn't really something that Mastercoin, or Counterparty, has anything to do with directly. The Mastercoin Project just loves throwing around such buzzwords. 'Smart property' is hardware (like a car) that might itself, for instance, parse Bitcoin, or Mastercoin, or Counterparty transactions, and behave differently depending on what it sees (e.g. unlock itself only for someone with a particular private key). The only real prerequisite technology at the protocol level is virtual assets, which Counterparty has totally working and Mastercoin hasn't even begun to implement.

A 'smart contract' is a more general idea, and really applies to any contract enforced by a protocol. Bitcoin, Mastercoin and Counterparty all have these to varying degrees. Counterparty undeniably has the most sophisticated and diverse smart contracts at the moment, though. The only smart contracts implemented in Mastercoin that I know of are those of its mostly-still-in-the-planning-stages distributed exchange.