If you’re approaching retirement and considering selling your investment property to support your next chapter, recent Capital Gains Tax (CGT) proposals have added a new layer of complexity—and potential cost—to your decision.
From 1 July 2027, the long-standing 50% CGT discount will be replaced with cost base indexation and a 30% minimum tax floor. For pre-retirees holding property with significant unrealised gains, this represents one of the most meaningful shifts to investment strategy in decades.
With change, however, comes opportunity. A well-structured strategy, particularly using unused carry forward concessional contributions, can materially reduce the tax impact of a sale and redirect those savings into your superannuation, where they can continue to work for you in retirement.
The Pre-Retirement Property Question
As retirement approaches, many clients reassess the role property plays in their broader financial picture.
Questions naturally arise:
- Is this asset still serving my lifestyle and income needs?
- Will ongoing costs impact my retirement cash flow?
- Do I want to remain hands-on with tenants and maintenance?
- How do I unlock capital to support my lifestyle, travel, or healthcare costs?
These decisions shape both your finances and your day-to-day lifestyle, making careful timing and thoughtful structuring essential.
A Changing CGT Landscape
The proposed 2026 Federal Budget changes reshape how property gains are taxed:
Current rules (to 30 June 2027):
- 50% CGT discount applies after 12 months
- Only half of the capital gain is included in assessable income
Proposed rules (from 1 July 2027):
- Post–July 2027 gains move to cost base indexation
- A minimum 30% tax applies to net capital gains after indexation
What this means:
As time progresses, an increasing share of your overall gain may be captured under the new rules, which can lessen the tax advantages of holding the asset longer.
Timing Matters but Strategy Matters More
This creates a natural question: should you sell before the rules change?
For some, bringing forward a sale may make sense. For others, it may not align with broader financial or lifestyle goals.
Rather than reacting to deadlines, the focus should be on structuring the outcome, so that whenever you sell, you do so in a tax-aware, intentional way.
Unlocking Opportunity with Carry Forward Contributions
For many pre-retirees, one of the most underutilised opportunities sits within their superannuation.
Carry forward concessional contributions allow you to use unused contribution caps from the previous five financial years, creating a significant window to contribute more than the standard annual cap.
These contributions are taxed at just 15% within super, making them a powerful tool to offset higher personal tax rates in the year of a property sale.
Key considerations:
- Available if your total super balance is below $500,000 (at 30 June of the prior year)
- Unused caps can be carried forward from 2020/21 onwards
- The concessional cap is $30,000 for 2025/26
A Practical Example (names have been changed)
David and Susan, both 65, are planning their transition into retirement.
- David is self-employed and works part-time, earning an annual taxable income of $60,000 from wages and rent. He has not made any personal super contributions so far this financial year.
- Susan is retired, earning $15,000 from rent
- They own an investment property in joint names purchased15 years ago for $400,000, now worth $900,000
- Combined super balance: $520,000; David $320,000, Susan $200,000
- Unused concessional caps: David $135,000, Susan $110,000
- They’re considering selling the property to fund their retirement
Scenario 1: Selling Without Super Strategy
- Capital gain: $500,000
CGT discount (50%): $250,000 taxable gain ($125,000 each) - David’s taxable income: $60,000 + $125,000 = $185,000
- Susan’s taxable income: $15,000 + $125,000 = $140,000
Total tax payable: ~$89,000
Scenario 2: Selling With Carry Forward Contributions
- Capital gain: $500,000
CGT discount (50%): $250,000 taxable gain ($125,000 each) - David’s taxable income: $60,000 + $125,000 (less $135,000 super contribution)
= $55,000
- Susan’s taxable income: $15,000 + $125,000 (less $110,000 super contribution)
= $25,000
Revised Income tax payable: ~$9,750
Plus, Tax on super contributions (15%): $36,750
Total tax payable: ~$46,500
Tax saving: $42,500 – funds now transferred into their superannuation, where they can be accessed given their age and retirement status.
Clarity and Confidence for Your Retirement Decisions
Retirement planning is deeply personal, and every decision plays a role in shaping the lifestyle you want to lead. Navigating changes to the CGT landscape requires a considered approach—one that aligns your financial position with your long-term goals.
At Boutique Advisers Private Wealth, we take a structured and tailored approach to help you move forward with clarity. Through detailed modelling and personalised advice, we assess your position, explore your options, and design strategies that support income sustainability, tax efficiency, and long-term flexibility.
Whether you are preparing for retirement, transitioning into it, or reviewing your current arrangements, our focus is on ensuring your wealth is working efficiently to support the life you envision—today and into the future.
Speak with one of our experienced financial advisers to explore how these strategies may apply to your circumstances. We’ll work with you to assess your position and guide you towards an approach that aligns with your retirement objectives.
