Timing Property Sales Around Retirement Under New CGT And Super Rules

Timing property sales around retirement is about sequencing – deciding which properties to sell, in what order, and in which tax years – so CGT, super contributions and your debt position all work together rather than against you. Under the post‑2026 regime, you need to think about CGT discounts, the new minimum tax settings, downsizer contributions, contribution caps and small business concessions at the same time.

In your 50s and 60s, a rushed sale can permanently lock in avoidable tax and leave you asset‑rich but income‑poor. A well‑timed sale, by contrast, can clear debt, top up super and simplify your life without losing more to the ATO than necessary.

Different property types feed into separate CGT and super contribution decisions as you approach retirement.

1. The new landscape: what’s changed for pre‑retiree property owners

1.1 Why timing now matters more than it used to

Several reforms landing around 2026–27 change the game for property‑heavy retirees:

1. CGT settings are tightening – higher effective tax on some capital gains and a new minimum tax on certain investment income for higher‑income and trust structures (per 2026–27 Federal Budget papers and CPA Australia analysis).
2. Negative gearing is being restricted for many established residential properties bought after 12 May 2026, with wage‑offset deductions largely quarantined from 1 July 2027 (see broader gearing impacts).
3. Discretionary trust income is facing a minimum tax floor, reducing the benefit of sprinkling capital gains across low‑income adult beneficiaries.
4. Retirement income is under more pressure from still‑elevated inflation and higher for longer interest rates (RBA August 2026 Statement on Monetary Policy).

Net result: the old rule of “just hold everything until you feel like selling” is less reliable. Portfolio‑level planning – across your home, investments, business property and SMSF – now matters more than marginal rate tinkering.

1.2 Property categories that behave very differently at retirement

Before you talk timing, you need to know which “bucket” each property sits in:

• Main residence – usually fully CGT‑free under the main residence exemption, but watch partial use for business or renting.
• Investment property (residential) – 50% CGT discount for individuals/trusts after 12 months still applies, but effective tax outcomes will be shaped by new minimum tax and negative gearing changes.
• Business real property – may access the small business CGT concessions when tied to an active business under the $2m turnover or $6m net asset tests.
• SMSF property – gains taxed at 15% in accumulation, 0% (up to transfer balance cap) in retirement phase, subject to proportioning rules.

Each bucket has its own “sweet spot” timing window. Your job is to line these windows up with your planned retirement age, debt exit plan and super contribution opportunities.

2. CGT basics and what the new rules change

2.1 Quick refresher: how CGT normally works for property

For most personally held investment properties:

• Capital gain = sale price – cost base (purchase price + stamp duty + legal + buying/selling costs + certain capital works).
• If held >12 months, individuals and most trusts get a 50% CGT discount.
• That discounted gain is added to your other taxable income for that year and taxed at your marginal rate.

Example (simplified, no indexation, current rules):

• Bought for $600,000 in 2012.
• Sell in 2027 for $1,100,000.
• Costs (stamp duty, legals, selling) total $60,000.
• Gain = $1,100,000 – ($600,000 + $60,000) = $440,000.
• Discounted gain (50%) = $220,000.

If your other income that year is $80,000, your taxable income becomes about $300,000. The top slice is taxed at your highest marginal rate.

2.2 The main residence and partial exemptions

Your principal place of residence (PPOR) is normally CGT‑exempt if:

• It’s your main home.
• You don’t use it mainly to produce assessable income.
• The land is ≤ 2 hectares.

You can still be fully exempt even if you:

• Move out and rent it, using the 6‑year absence rule (if you don’t claim another main residence in that time), or
• Knock down and rebuild within certain timeframes.

Partial tax issues appear when:

• You rent out a granny flat or rooms long‑term.
• You run a business from home with small business CGT concessions claimed on that part.

These partial use situations matter for retirement timing: you may choose to sell earlier to keep a larger portion under the exempt period.

2.3 The 2026–27 changes: what’s relevant for retirees

Based on the 2026–27 Budget announcements and CPA Australia commentary (final legislation may tweak details):

• CGT minimum tax and discount changes will apply more heavily to larger gains and some trust‑held investments.
• Discretionary trusts may face a minimum effective tax rate on distributed investment income and gains, reducing the benefit of streaming big gains to low‑tax adult children.
• New negative gearing rules reduce wage‑offset benefits for new established properties; post‑2027, pre‑tax cashflow and long‑term after‑tax gain matter more than annual deductions.

For pre‑retirees, this means:

• Large non‑main‑residence gains in your late 50s may cop more tax than they would have a few years earlier.
• The old strategy of buying another negatively geared investment in your 60s to offset a gain becomes weaker.

You still have powerful tools – including timing across years, small business concessions and super contributions – but you need to use them intentionally.

3. Super and downsizer contributions: the other half of the timing puzzle

3.1 Key contribution types linked to property sales

When planning a sale around retirement, you’re really asking: “How much of these proceeds can I move into the low‑tax super environment, and when?”

Main relevant contribution types:

• Concessional contributions (CCs) – usually employer + salary sacrifice + personal deductible; annual cap currently $30,000 (indexed). Taxed at 15% in the fund.
• Non‑concessional contributions (NCCs) – personal after‑tax funds; annual cap currently $120,000 (with bring‑forward up to 3 years for eligible ages and balances).
• Downsizer contributions – from sale of your home; up to $300,000 per person ($600,000 per couple) if aged 55+ (current rules) and meeting conditions.

A single sale can fund all three, but timing matters for:

• Age‑based rules.
• Total super balance thresholds.
• The strict 90‑day downsizer contribution window from settlement (covered in depth in /insights/using-sale-proceeds-super-downsizer-contributions-rebuild-position).

3.2 How downsizer contributions interact with CGT timing

Downsizer contributions do not change the CGT on your home sale. They do:

• Let you move up to $300k per person into super without counting toward NCC caps.
• Apply regardless of your total super balance.

Sequencing implications:

• If you want to maximise money in super, you may sell the home slightly earlier, while you still meet age and downsizer rules and can then re‑buy something modest with the remainder.
• If you plan to rent in retirement, you might use more of the proceeds for super and debt pay‑down.

3.3 Super and small business CGT concessions – powerful when coordinated

If you sell business real property (e.g. a factory or office used by your business), the small business CGT concessions can:

• Reduce or eliminate the gain (via the 15‑year exemption or 50% active asset reduction).
• Allow up to $500,000 per person lifetime to be contributed to super under the retirement exemption, separate from normal caps.

The interaction between:

• The sale year (for CGT), and
• The contribution year (for super)

is critical. Our companion guide on capital losses and small business concessions steps through the updated rules and sequencing in more detail: /insights/capital-losses-small-business-cgt-concessions-new-budget-settings.

The same capital gain can have a different tax cost depending on the year and your other income.