Eligible concessional superannuation contributions may help reduce the taxable income generated from the sale of an investment property, potentially lowering your capital gains tax liability.
14 July, 2026
Reduce CGT with Super Contributions
First Financial Team
Recent budget reforms have put a damper on real estate investing as a wealth accumulation vehicle. Changes to capital gains tax and the way the ATO assesses what property owners can claim as tax deductions for short-term rental properties have led many Australians to review their financial plans.
For some, this means selling an investment property. The advantages can be financially rewarding, but it can also result in a sizeable capital gains tax (CGT) bill. For many clients approaching retirement, that tax liability has come as an unwelcome surprise, reducing the proceeds available to invest or enjoy in retirement.
First Financial Principal, author, and financial educator James Wrigley recently highlighted a strategy many Australians are unaware of: using concessional superannuation contributions to potentially reduce tax payable in the same financial year as the sale of an investment property. While the strategy won’t eliminate CGT altogether, it can also create a valuable tax deduction and increase your retirement savings.
Like all tax strategies, the details matter. Understanding how the rules work and whether they’re appropriate for your circumstances is essential before making any decisions.
"The most effective tax strategies begin well before contracts are exchanged, giving you time to structure your superannuation contributions correctly."
How can superannuation reduce your tax bill?
When you make a concessional (before-tax) contribution to superannuation, you may be able to claim that contribution as a tax deduction, provided you meet the eligibility requirements. That deduction reduces your taxable income for the financial year. If you’ve sold an investment property during that same year and realised a capital gain, the additional tax deduction may help offset part of the taxable gain, reducing the overall amount of tax you pay.
Importantly, you’re not avoiding tax. Instead, you’re moving money into one of Australia’s most tax-effective investment structures while legitimately reducing your assessable income.
Understanding the concessional contribution cap
Every financial year, there is a limit on the amount that can be contributed to super as concessional contributions. For the 2026–27 financial year, the concessional contributions cap is $31,000. This cap includes all concessional contributions made during the year, including:
- Employer Superannuation Guarantee contributions
- Salary sacrifice contributions
- Personal deductible super contributions
For example, if your employer contributes $16,000 into your super during the financial year, you may be able to contribute a further $15,000 as a personal concessional contribution and claim a tax deduction, bringing your total concessional contributions to the annual cap.
Making that additional contribution could reduce your taxable income in the same year you sell your investment property.
The real opportunity: Carry-forward concessional contributions
As James explains in his TikTok, the strategy becomes valuable through the carry-forward concessional contribution rules. If your total superannuation balance was below the relevant eligibility threshold at 30 June of the previous financial year, you may be able to use any unused concessional contribution caps from the previous five financial years.
This means that if you haven’t maximised your concessional contributions in recent years, you may have accumulated additional contribution capacity. Rather than being limited to this year’s annual cap, you could potentially contribute substantially more into super, claim a much larger tax deduction and further reduce the taxable income generated by your property sale.
For investors facing a significant capital gain, this can be a powerful planning opportunity.
Naturally, timing and advice are essential considerations
As James explains, timing is an essential consideration. The deductible super contribution generally needs to be made in the same financial year that the capital gain is realised if you intend to use the deduction to offset that year’s taxable income.
If you’re considering selling an investment property within the next 6 to 10 months, ensure you discuss your options with your financial adviser before contracts are exchanged to allow sufficient time to structure any contributions appropriately.
Now, while this strategy has advantages, it is not necessarily suitable for everyone. Your age, employment status, contribution history, taxable income and existing superannuation balance all influence whether this strategy is appropriate.
There are also contribution rules, eligibility requirements and tax considerations that need to be carefully managed. For example, exceeding your concessional contributions cap can result in additional tax consequences, and other factors, such as your cash flow requirements and retirement objectives, should also be considered. This is why strategies like these work best when they’re incorporated into a broader financial plan rather than considered in isolation.
Think beyond the immediate tax saving
Although reducing your tax bill is an obvious benefit, the strategy also helps increase the amount invested within the concessionally taxed superannuation environment. For Australians in their 50s and 60s, this can provide a double benefit, reducing tax today while improving retirement savings for tomorrow.
Rather than viewing capital gains tax simply as an unavoidable expense, it can become an opportunity to improve your overall financial position by redirecting some of the proceeds into your long-term retirement strategy.
Tax and superannuation rules are complex and change regularly, and every person’s circumstances are different. If you’re planning to sell an investment property, speaking with a qualified financial adviser before the sale takes place will help you identify legitimate strategies that reduce tax, maximise your superannuation and improve your long-term retirement outcomes.
"With the right planning, the sale of an investment property can become an opportunity to reduce tax today while strengthening your retirement savings for tomorrow."
Disclaimer: This article contains general information only and does not take into account your personal objectives, financial situation or needs. The information is current as of the date of publication and is subject to change. Before making any financial decisions, you should consider whether the information is appropriate to your circumstances and seek professional financial advice.
The team at First Financial comprises financial experts who help hundreds of Australians retire well and make informed, intelligent financial decisions. We cover everything from retirement and financial advice, investment and wealth management, superannuation and SMSF, insurance, tax, aged care, legal and lending services.
Contact us for holistic, well-rounded financial management strategies.
Key Takeaways
Carry-forward concessional contribution rules may allow eligible Australians to claim significantly larger tax deductions by using unused contribution caps from the previous five financial years.
Timing is critical. To maximise tax benefits, deductible super contributions generally need to be made in the same financial year as the capital gain is realised.
Every investor’s circumstances are different. Seeking professional financial advice before selling an investment property can help ensure the strategy aligns with your tax position, superannuation rules and long-term retirement objectives.
YOUR FINANCIAL JOURNEY
Building your financial future
Every client journey begins with a conversation. We look closely at where you are now, what matters to you, and what’s possible. Then we structure our advice to match.
Financial
Roadmap
A clear, personalised path to your financial goals.
Tax
Efficiency
Proactive strategies to maximise your tax savings.
Personalised
Investing
Tailored plans aligned with your goals and risk profile.
Ongoing
Support
Regular guidance to keep your plan on track.
CLIENT STORY
Larry and Virginia
Life Stage:
Newly retired
Background:
As retirement neared, Larry and Virginia were ready to enjoy travel, family, and freedom, without uncertainty. A friend recommended First Financial, and from the first meeting, they had a clear plan, a safety net, and people they trusted.
- Wanted to travel and enjoy retirement without second-guessing finances
- Needed a structured income plan with buffers for the unexpected
- Valued guidance that felt honest and human, not overcomplicated
- Needed people they could call and count on
- Created a reliable income stream with a set-aside safety net for the unexpected
- Gave them the freedom to travel and spend meaningfully with family
- Kept advice simple, thoughtful, and tailored to what mattered to them
- Built a lasting partnership based on trust
“We’ve travelled the world, Europe, Sri Lanka, Vietnam, without once stressing about the money. They made everything feel simple and gave us the confidence to live well. We feel secure because we know exactly where we stand, and that peace of mind means everything.”
CLIENT STORY
Jan
Life Stage:
Retired
Background:
Jan's husband managed the finances until entering aged care. Jan gradually stepped into the financial picture with First Financial’s support.
- Needed financial guidance after business sale
- Lacked experience managing complex finances
- Sought consistent income and long-term structure
- Wanted a familiar, reliable relationship
- Provided long-term support through several transitions
- Helped structure income reliably for retirement
- Empowered Jan through education and reassurance
- Delivered calm advice through both grief and growth
“The money just comes in. I don’t have to think about it. And I know they’re always there. They’ve always been there in the background, just quietly making things work.”
CLIENT STORY
Tim and Adam
Life Stage:
Early retirement and working professional
Background:
When Tim received an overseas medical settlement, he and Adam had just 14 days left in a 90-day window. They needed clear guidance, fast. A referral led them to First Financial.
- Only two weeks left to meet urgent legal and financial deadlines
- Wanted to preserve capital while setting up income for the future
- Needed a plan that supported both retirement and ongoing work
- Hoped to find advice that felt personal, not transactional
- Managed every moving piece, from legal documents to super rollovers
- Designed a strategy that supported both Tim’s retirement and Adam’s career
- Offered clear guidance with steady follow-through, with no stress or pressure
- Built in ethical investing and flexibility, without sacrificing performance
“We’re in totally different life stages, but First Financial built a strategy that supports us both. From urgent legal steps to ethical investing, they handled every detail with calm, care, and real expertise. It’s financial freedom without compromise, and we couldn’t have done it without them.”
CLIENT STORY
Lyn
Life Stage:
Retired widow
Background:
Lyn stepped into financial management for the first time after her husband's passing. With patience and care, First Financial supported her through grief, learning, and empowerment.
- Had never managed finances before
- Was overwhelmed after her husband’s passing
- Needed plain-English explanations and patience
- Sought emotional support and practical clarity
- Offered caring, respectful advice at her pace
- Rebuilt confidence with diagrams, stories, and reassurance
- Supported gradual decision-making around retirement
- Remained a trusted constant through major transitions
“After my husband passed, I was completely unsure where to start. First Financial gave me the space to learn, to ask questions, to grow confident. They drew a diagram that I still have. And now, I sleep well at night knowing I’ve got someone in my corner.”
CLIENT STORY
John
Life Stage:
Retired business owner
Background:
After decades of running a successful pharmacy, John sought financial guidance to simplify decision-making and support long-term planning.
- Navigated the sale of a long-held business
- Wanted simple, honest advice after burnout
- Needed a hands-on adviser he could talk to
- Desired financial guidance aligned with lifestyle goals
- Crafted a strategy that supports relaxed, post-work life
- Offered approachable, plain-English advice
- Maintained an ongoing, trustworthy relationship
- Provided flexibility with investments and cash flow
“I feel genuinely supported by First Financial. I can ask anything, and there’s no pressure, just clear advice and real care. The money’s growing, I’m not stressed about it, and I feel completely at ease for the first time. I don’t miss work, but I’d miss the support I get from First Financial.”
CLIENT STORY
Graeme and Craig
Life Stage:
Retired and semi-retired
Background:
Referred by friends who were helped through aged care, Craig sought secure financial guidance after inheriting funds.
- Invest inheritance securely without high risk
- Maintain a modest lifestyle with confidence
- Building trust for someone new to advice
- Accessible, personalised advice
- Provided a low-risk strategy with regular income
- Reassured with steady, market-aware updates
- Established trust through responsiveness and warmth
- Delivered calm, expert support through all transitions
“We feel very secure with First Financial, the income just comes in, and we know everything is being looked after. It’s not just safe, it’s smart. We’ve recommended them to others because we genuinely believe in the team.”
Meet our advisers
Frequently Asked Questions
Can superannuation contributions help reduce capital gains tax?
Yes, making eligible concessional superannuation contributions may create a tax deduction that reduces your taxable income in the same financial year as the capital gain. While it won’t eliminate CGT, it may reduce the overall tax payable.
What are concessional superannuation contributions?
Concessional contributions are before-tax contributions made to your super, including employer Superannuation Guarantee contributions, salary sacrifice contributions and personal deductible contributions. These contributions are generally taxed at a concessional rate within super.
What is the concessional contributions cap?
For the 2026–27 financial year, the concessional contributions cap is $31,000. This cap includes all concessional contributions made during the financial year, regardless of the source.
What are carry-forward concessional contributions?
Carry-forward rules may allow eligible Australians to use any unused concessional contribution caps from the previous five financial years. This can provide a significantly larger tax deduction if your total superannuation balance meets the eligibility requirements.
When should I make a super contribution if I'm selling an investment property?
Generally, the deductible superannuation contribution must be made in the same financial year as the capital gain is realised. Speaking with a financial adviser before exchanging contracts can provide more flexibility to structure the strategy correctly.
Is this strategy suitable for everyone selling an investment property?
No. Factors such as your age, super balance, contribution history, taxable income and retirement objectives all influence whether this approach is appropriate for your circumstances.
What are the risks of exceeding the concessional contributions cap?
Contributing more than your available concessional cap may result in additional tax consequences. Professional advice can help ensure your contributions remain within the relevant limits.
How can First Financial help with capital gains tax and superannuation strategies?
First Financial provides holistic financial advice that considers your tax position, superannuation, retirement goals and broader wealth strategy. Their advisers can help determine whether using super contributions to reduce CGT is appropriate for your individual circumstances.