Somewhere in their late fifties, most of the property investors I know start wondering the same thing: should I sell my investment property before retirement? It usually comes as a yes or no question. It rarely is one. Selling is my last resort, not my first, though sometimes it’s the stronger position.
Selling changes several things at once. Holding keeps them as they are, and any growth stays with you. I often come back to two questions. How old will you be in five years if you sell? How old will you be in five years if you hold? The years pass either way. The question is which position you want to be in when they have.
Selling an investment property before retirement: what changes
- The growth stops for you. From settlement, the next owner keeps whatever the property gains.
- The rent stops. Whatever that property earned, net of its costs, leaves your income.
- The debt against it is usually repaid from the sale. That lowers the interest you pay, which can lift your income, sometimes by more than the rent you gave up.
- There are costs on the way out. Agent’s fees, marketing and legal costs come off the price before you see the proceeds.
- There may be capital gains tax. How much depends on how long the property was held, how it is owned, and what else happens in that financial year.
- The money left over has to go somewhere: to clear other debt, to sit as cash, into super if the rules allow, or to fund something else. Each produces a different income.
I have met people who sold in a hurry and only found out later how much tax the sale cost them. The time to see that figure is before the contract is signed.
The 2027 change to capital gains
From 1 July 2027, capital gains are taxed differently. For a property held before 1 July 2027, the gain up to that date keeps the 50 per cent discount. The line is drawn at its value on 1 July 2027, from a valuation or an ATO apportionment formula. The gain after it is taxed under the new rules: the cost base rises with inflation, and the gain carries a minimum tax rate of 30 per cent. That minimum does not apply in an income year in which you receive the Age Pension or another listed government payment. A Commonwealth Seniors Health Card on its own does not count. For some people this makes the timing of a sale weigh more than it did; for others it changes little. An accountant with your own figures can tell you which.
What does not change
The other properties are still there, with their own rent, costs and loans. Selling one does not fix a structure that was set up for growth across the rest. Your need for income does not change either: how much you need each year, after tax, in today’s money, and for how long. And the choice is not all or nothing. Between keeping everything and selling everything there are usually several positions worth looking at.
Doing nothing is a position too
When I set out someone’s options, keeping everything is always the first position, and every other route is measured against it on the same terms. Holding can turn out to be the stronger position. Selling one property can change the picture a great deal. Selling more can leave you with less income. Until the positions sit side by side, it is very hard to tell which, and that is what Position and Pathways shows. The decision stays yours, made with the numbers in front of you rather than on a feeling.
The time to talk it through is before a property is listed. To do that, book a first conversation. It costs nothing.
Nicholas Lockhart
This article reflects the law as at 10 October 2026.
Source: Australian Taxation Office, Tax reform - Boosting home ownership - Reforming negative gearing and capital gains tax (updated 29 June 2026); Budget 2026-27 Tax Explainer, Negative gearing and capital gains tax.