Retired and Questioning Selling Your Investment Property?

Thursday, September 17, 2026

With changes to the CGT rules approaching and Australian property prices currently declining in many markets, the decision to sell an investment property is becoming more complicated, particularly for retirees who have strategised their retirement investments to include investment property.

Your accountant may have raised tax considerations with CGT changes from July 2027.  Now may be the right time to have a broader conversation about whether selling is actually the best decision for your retirement investment strategy.

Why are the CGT changes important?

Under the current rules, an individual who has held an investment property for more than 12 months can generally access a 50% CGT discount on the capital gain.

From 1 July 2027, new rules will apply to capital growth occurring after that date, incorporating an inflation-adjusted approach.

Importantly, this does not mean that the 50% CGT discount simply disappears from an existing investment property on 1 July 2027. Broadly, the gain accrued up to 30 June 2027 retains the benefit of the existing 50% discount, with the new treatment applying to subsequent growth.

Consequently, selling before 1 July 2027 may produce a different tax outcome from selling later — but that does not automatically make selling before July 2027 the better financial decision.

What if property prices continue to fall?

This is where the decision becomes more interesting.

If your investment property has already fallen in value, selling today could crystallise a lower capital gain than might have been achieved when the market was stronger. On the other hand, continuing to hold the property exposes you to the possibility of further price falls.

For a retiree, there is another consideration: how much of your wealth is tied up in one property?

Property can provide valuable rental income and long-term capital growth, but it is also not very liquid. If you need additional capital to fund retirement, you cannot sell part of a property in the same way you can sell part of an investment portfolio.

There are also ongoing costs including rates, insurance, maintenance, property management and potentially periods without a tenant to consider.

An example

Imagine you purchased an investment property for $500,000 and it is worth $1 million around 30 June 2027.

If you sell, the capital gain up to that date would be $500,000. Assuming the 50% CGT discount applies, approximately $250,000 would be included in your taxable income, before taking account of eligible costs and other adjustments.

If you retain the property and it subsequently increases in value, the growth after 1 July 2027 will be dealt with under the new CGT arrangements.

However, if property prices remain flat or decline after 1 July 2027, there may be little or no additional real capital gain on the property. This means that selling before July 2027 solely to take advantage of the existing CGT discount may not necessarily produce the best overall outcome.

At the same time, if property values continue to decline, it may also be worth reviewing whether the property remains the most appropriate investment for your retirement. Selling the property and redirecting some, or all of the proceeds into superannuation or a diversified investment portfolio may be worth considering, depending on your tax position, superannuation contribution eligibility, income requirements and overall retirement strategy.

This demonstrates why the tax rules and the investment decision need to be considered together.

Your accountant is well placed to advise on the tax consequences of selling your property. Your financial adviser can help put those tax consequences into the context of your overall retirement strategy.

Before deciding to sell, consider:

• How much rental income does the property provide?
• What are the property's ongoing costs?
• How much of your wealth is concentrated in property?
• Do you need greater liquidity to fund retirement?
• What is the outlook and risk associated with the particular property?
• What would you do with the proceeds if you sold?
• How would the sale affect your retirement income?
• What are the CGT consequences of selling now compared with later?

The right decision may be to retain the property or sell and restructure your broader investment portfolio.

Don't make a major investment decisions based on tax alone

The upcoming CGT changes provide a good reason to review your investment property, particularly given current property market conditions. But avoiding tax is not the same as creating wealth or improving your retirement position.

At Maher Digby Securities as retirement investment specialists, we can work alongside your accountant to help assess the investment, tax and retirement-income considerations together.

For more information, contact Mark Digby at Maher Digby Securities Pty Ltd – Financial Advisers (AFSL No. 230559).
This document contains general advice only and does not take into account your individual objectives, financial situation or needs. You should consider whether the information is appropriate for your circumstances before acting on it. While care has been taken in preparing this material, no representation or warranty, express or implied, is given as to its accuracy, reliability or completeness. To the maximum extent permitted by law, Maher Digby Securities Pty Ltd accepts no liability for any loss arising from reliance on this information, including opinions, forecasts or forward-looking statements. We recommend that you seek professional financial advice before making any investment or financial decisions